# 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:

.

for 2 years:

.

similarly for 3 years:

.

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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