Answer :
The simple interest shows linear growth because it is adding a constant amount.
The compound interest shows exponential growth because it is multiplying by a constant amount.
What is simple interest?
"Simple interest can be defined as the sum paid back for using the borrowed money, over a fixed period of time."
What is compound interest?
"Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest."
Here the principle amount is $100.
Simple interest rate is 7%.
Compound interest is 5% compounded quarterly.
After 5 years, with simple interest, the amount will be
= $[100 + (100 × 7 × 5)/100]
= $[100 + 35]
The simple interest shows linear growth because it is adding a constant amount.
After 5 years, with compound interest, the amount will be
= $[100(1 + 0.05/4)⁴⁽⁵⁾]
= $[100(1 + 0.0125)²⁰]
= $[100(1.0125)²⁰]
Therefore, the compound interest shows exponential growth because it is multiplying by a constant amount.
Learn more about simple and compound interest here: https://brainly.com/question/12999306
#SPJ3