Q2. Principal = Rs.1000, Rate = 8% per annum. Fill in the following table and find which type of interest (simple or compound) changes in direct proportion with time period.
Given that Principal (P) = 1000 and Rate (r) = 8% per annum(per year).
Calculating the Simple Interest:
Formula for the simple interest is = .
So, for 1 year:
for 2 years:
similarly for 3 years:
Calculating the Compound Interest :
The formula for the compound interest is
So for 1 year:
Hence we have
In case of simple interest
Simple interest is directly proportional with time.
While in case of compound interest:
does not give the same constant.
Compound interest is not directly proportional with time.
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