Michael has a total of $2000 on deposit with two saving institutions. One pays interest at the rate of 6% per year whereas the other pays interest at a rate of 8% per year. If Michael earned a total of $144 in interest during a single year, how much did he deposit in each institution? [Use the substitution method to solve]

Answer 1

Let the amount earning 6% be X and the amount earning 8% be Y. You have to solve these two equations in two unknowns.

X + Y = 2000
0.06 X + 0.08 Y = 144

Substitute 2000 -X for Y in the second equation and solve the resulting equation for X.

0.06X + 0.08(2000 - X) = 144
160 -144 = 0.02 X
X = $800
Y = 2000 - X = $1200

Answer 2

X=120 Y=160
Y= 144-X