Let:

x = amount invested in fund 1, which earned 7% and

y = amount invested in fund 2, which earned 2%

Set up a system of 2 equations:

The total amount invested is the sum of the amounts invested in fund 1 plus the amount invested in fund 2:

I - x + y = 2,900

The total interest earned is the sum of the interest earned by fund 1 plus the interest earned by fund 2:

II - 0.07x + 0.02y = 148

Solve for x in equation I: x = 2,900 - y

Substitute x in equation II: 0.07(2,900 - y) + 0.02y = 148

Solve for y: 203 - 0.07y + 0.02 y = 148

-0.05y = -55

y = 1,100

Since y represents the amount invested in fund 2, we may now write the answer:

The amount invested in fund 2, which earned 2% was $1,100

The amount invested in fund 1, which earned 7% was $1,800

Now check your answer:

Total amount invested: $1,100 + $1,800 = $2,900

Total interest earned: $1,100(0.02) + $1,800(0.07) = $148