Question 14 Marks
Principal $=₹ 1000$, 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.
| Time period | 1 yr | 2 yr | 3 yr |
| Simple interest (in ₹) | |||
| Compound interest (in ₹) |
Answer
View full question & answer→Given, $P=$ ₹ $ 1000, R=8 \%$
Simple interest for different time periods
(i) For $T=1 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 1}{100}=$ ₹ $ 80
$
(ii) For $T=2 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 2}{100}=$ ₹ $ 160
$
(iii) For $T=3 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 3}{100}=$ ₹ $ 240
$
Compound interest for different time periods
(i) For $T=1 yr$
Compound interest $=P\left(1+\frac{R}{100}\right)^T-P$
$=1000\left(1+\frac{8}{100}\right)^1-1000$
$=1000 \times \frac{108}{100}-1000$
$=1080-1000=$ ₹ $80$
(ii) Ans. ₹ 166.40
(iii) Ans. ₹ 259.712
Hence, the complete table is as follows
Now, ratio of simple interest with time period are as follows :
For $1 yr , \frac{80}{1}=80$
For $2 yr , \frac{160}{2}=80$
and for $3 yr , \frac{240}{3}=80$
Here, ratio of simple interest with time period is same for every year. Hence, the simple interest changes in direct proportion with time period.
Ratio of compound interest with time period are as follow
For $1 yr , \frac{80}{1}=80$
For $2 yt , \frac{166.40}{2}=8.2 .20$
and for $3 yt , \frac{259.712}{3}=86.5706$
Here, ratio of compound interest with time period is not same for every year. Hence, the compound interest does not change in direct proportion with time period.
Simple interest for different time periods
(i) For $T=1 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 1}{100}=$ ₹ $ 80
$
(ii) For $T=2 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 2}{100}=$ ₹ $ 160
$
(iii) For $T=3 yr$,
$
\text { Simple interest }=\frac{P R T}{100}=\frac{1000 \times 8 \times 3}{100}=$ ₹ $ 240
$
Compound interest for different time periods
(i) For $T=1 yr$
Compound interest $=P\left(1+\frac{R}{100}\right)^T-P$
$=1000\left(1+\frac{8}{100}\right)^1-1000$
$=1000 \times \frac{108}{100}-1000$
$=1080-1000=$ ₹ $80$
(ii) Ans. ₹ 166.40
(iii) Ans. ₹ 259.712
Hence, the complete table is as follows
| Time period | 1 yr | 2 yr | 3 yr |
| Simple interest (in ₹) | 80 | 160 | 240 |
| Compound interest (in ₹ ) | 80 | 166.40 | 259.712 |
For $1 yr , \frac{80}{1}=80$
For $2 yr , \frac{160}{2}=80$
and for $3 yr , \frac{240}{3}=80$
Here, ratio of simple interest with time period is same for every year. Hence, the simple interest changes in direct proportion with time period.
Ratio of compound interest with time period are as follow
For $1 yr , \frac{80}{1}=80$
For $2 yt , \frac{166.40}{2}=8.2 .20$
and for $3 yt , \frac{259.712}{3}=86.5706$
Here, ratio of compound interest with time period is not same for every year. Hence, the compound interest does not change in direct proportion with time period.



