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Two investments are plotted against time on the same axes. Which one gives a straight line graph?
ACompound interest growth
BPopulation growth
CSimple interest growth
DPrice inflation growth
Answer & Solution
Correct answer: C. Simple interest growth
1. Simple interest adds the same amount of interest in every year.
2. Adding a constant amount each year produces a straight line graph.
3. Compound interest adds a growing amount each year and produces an exponential graph.
4. Population growth and inflation both follow the compound pattern, so neither of those plots as a straight line.
_Source: Siyavula Mathematics Grade 10 (Everything Maths, CC BY 4.0), Chapter 9: Finance and growth_