Question

Formulate but do not solve the problem. Michael Perez deposited a total of $2000 with two savings institutions. One pays interest at a rate of 6%/year, whereas the other pays interest at a rate of 8%/year. If Michael earned a total of $148 in interest during a single year, how much did he deposit in each institution? (Let x and y denote the amount of money, in dollars, invested at 6% and 8%, respectively.) = 148 = 2000

Answer 1

Solution :

As per the information given in the question we have

Total amount invested in two savings institutions = $ 2,000

Let Investment in Saving Institution 1 = x   ; Let Investment in Saving Institution 2 = y ;

Thus the total investment made ( in equation form ) shall be

x + y = 2,000   -    (1)

Further we know that the total interest earned = $ 148

Interest rate of Savings Institution 1 = 6 % = 0.06

Interest rate of Savings Institution 2 = 8 % = 0.08

Thus the total interest earned from both the Institutions can be represented as an equation as follows:

( Investment in Saving Institution 1 * Interest rate of Savings Institution 1 ) + ( Investment in Saving Institution 2 * Interest rate of Savings Institution 2 ) = $ 148

( x * 0.06 ) + ( y * 0.08 ) =148

Thus 0.06x + 0.08y = 148           -    ( 2)

Thus the problem when formulated is

x + y = 2,000  

0.06x + 0.08y = 148