Question

A bank gives $10.5 %$ simple interest on deposits by senior citizens. Draw a graph to illustrate the relation between the sum deposited and the simple interest earned. Find the following from your graph.

The annual interest obtained by a senior citizen for an investment of $1$ .

The annual interest obtained by a senior citizen for an investment of $₹ 5000$ .

Accepted Answer

Given: Rate of interest per annum $= 10.5 %$ , $time = 1 year$ .

$Simple interest = \frac{principal \times rate \times time}{100}$

So, for principal $₹ 10000$ , $Simple interest = \frac{10000 \times 10.5 \times 1}{100} = ₹ 1050$

Similarly, simple interest is calculated with different principal amount and the values obtained are as follows:

Sum deposited (in $₹$ ) $10000$ $7500$ $4000$ $2500$ $1000$

Simple interest(in $₹$ ) $1050$ $787.50$ $420$ $262.50$ $105$

To plot a graph of the above data, let us choose the scale first.

Along the $x - axis$ : $1$ small square $= 2000 units$

Along the $y - axis$ : $1$ small square $= 500 units$

Now let us plot the above points and join them successively to obtain the required graph.

To find the simple interest corresponding to $₹ 5000$ , we need to draw perpendicular to the $x -$ axis at $x = 5000$ and find the corresponding $y$ value. The value is $₹ 525$ as seen from the graph.

Hence, $₹ 525$ is the annual interest obtained by a senior citizen for an investment of $₹ 5000$ .

EXERCISE

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