Math Problem Statement

Consider an investment of $X.  Suppose that you are able to earn 10% a year on your investment rather than 5% per year over 7 years.  At the end of those 7 years, how much extra interest (compared to the original 5%) will you have earned on the investment?

Solution

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Exponential Growth
Percentage Increase

Formulas

A = P(1 + r/100)^t
Extra Interest = A_10 - A_5
Extra Interest = X * (1.1^7 - 1.05^7)

Theorems

Compound Interest Formula

Suitable Grade Level

Grades 9-12