[Video] Q14: The expression above gives the amount of money, in dollars, generated in a year by a $1,000 deposit in a bank account that pays an annual interest rate of r %, compounded monthly. which of the following expressions shows how much additional money is generated at an interest rate of 5% than at an interest rate of 3% ?

Explanation for Question 14 From the Math (Calc) Section on the Official Sat Practice Test 4

Now for number 14, we're looking at the question that they ask us, 2 right? Which says, which of the following expressions shows how much additional money is 3 generated by an interest rate of 5%, 4 then at an interest rate of 3%. So in other words, 5 they want to know if I have an interest rate of 5%, 6 how much more money am I going to make? 7 Then if I were to get an interest rate of 3% and we can 8 immediately think of this and solve this rather quickly, 9 actually, because if I told you that a friend of yours made $150 doing 10 a job and that you made a hundred dollars, 11 and I asked you how much more money did your friend make? 12 You would easily tell me $50, right? 13 Because you say, okay, one 50 minus 100. 14 The difference between those two is $50. 15 And so since we're searching for a difference here, 16 right? 17 Differences, a keyword for subtraction, which can lead us immediately to answer choice D 18 now, as far as a and B go more precisely why these are incorrect 19 is because they combine both interest rates into one number rather than keeping them 20 as separate two numbers. Right? And so having an interest rate of 5% and 21 3% doesn't mean that the difference between the two is an exact 2% reason 22 being because a 5% increase is going to go up really fast, 23 whereas the 3% increase goes up fast, 24 but not as fast. And so you can see that the difference between these 25 two changes as the numbers get bigger, 26 right? It starts pretty small, probably cl...

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