document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1082566>Question 1082566</A>: <I><SPAN STYLE=\"word-break: break-all;\"> how much interest does a $500 investment earn at 6% over 7 years </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #696619 by </B><A HREF=/tutors/aboutme.mpl?userid=math_helper><B>math_helper(2461)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=math_helper><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=math_helper><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=696619\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> It depends, if the interest is compounding one will earn more than if its just simple interest.<BR>\n" );
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document.write( "Simple interest:   $500*(0.06)*7 = $210.<BR>\n" );
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document.write( "(More likely scenario)<BR>\n" );
document.write( "Compound interest:  (this is when the interest from year 1, or payment period 1, is rolled into the invested amount so that the investment increases for the next interest payment):\r<BR>\n" );
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document.write( "    <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=+500%2A%281%2B0.06%29%5E7+-+500+=+751.82+-+500+ ALIGN=MIDDLE  ALT=\"+500%2A%281%2B0.06%29%5E7+-+500+=+751.82+-+500+\"   DISABLED_style= \"max-width:90%; height:auto;\" > = $<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=++251.82+ ALIGN=MIDDLE  ALT=\"++251.82+\"   DISABLED_style= \"max-width:90%; height:auto;\" > \r<BR>\n" );
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document.write( "You can see that power of compounding, after just 7 years, the compounded investment earns 20% more (= (251.82-210)/210 x 100%)  than the investment that pays simple interest.   </SPAN>\n" );
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