Eliza deposited ₹ 20,000 in a bank at the rate of 10% per annum. Draw a linear graph showing the time and simple interest relationship. Also, find the simple interest for 4 years.

Principal amount = P = 20,000 rs

Rate = r = 10%

Time = t

Simple interest = I =

⇒ I =

⇒ I = 2000t …(i)

Simple interest for 4 years implies t = 4

Put t = 4 in equation (i)

⇒ I = 2000 × 4

⇒ I = 8000 rs

Consider equation (i)

Linear graph means a straight line

Now to draw a straight line we need atleast two points

Consider t time on X-axis and I simple interest on Y-axis

Take any two values of t and find corresponding values of I

If t = 1 implies I = 2000 × 1 = 2000

Consider this as a point A with co-ordinates (1, 2000)

If t = 2 implies I = 2000 × 2 = 4000

Consider this as a point B with co-ordinates (1, 4000)

Plot points A and B and draw a line passing through them

Scale for graph

On X-axis 1cm = 1 year

On Y-axis 1 cm = 1000rs