Line Graphs (DI)

A line graph, also called a line chart is one of the basic charts to represent a set of data pictorially. In line graphs, a straight line segment connects data points (called markers), to represent a continuous change over a period of time. Since the data points show the information, line graphs are also known as point to point graphs.

Line Graph is the innovative version of Bar Graph representation. If we connect the upper point of the first Bar to the upper point of the second Bar and then tie these dots, we will get a line. Repeating the procedure gives us the Line Graph representation. Line graph and bar graph are easy to comprehend.

Important Points:

  • A Cartesian or Line Graph maps the variation of two or more parameters. The parameters are calibrated on the Horizontal (X) and Vertical (Y) axis. The values of parameters can be  read off by drawing straight lines to the X and Y axis.
  • Trends and rates of change are  easy to interpret in terms of changes in slope of lines (for example: steeper the slope, greater is the change in value)
  • If interpolation or extrapolation is required, then value of parameters may not be accurate.
  • Simplifies interpretation of data
  • More visually appealing than data tables

Example : 

Two different finance companies declare fixed annual rate of interest on the amounts invested with them by investors. The rate of interest offered by these companies may differ from year to year depending on the variation in the economy of the country and the banks rate of interest. The annual rate of interest offered by the two Companies P and Q over the years are shown by the line graph provided below.

Annual Rate of Interest Offered by Two Finance Companies Over the Years.

 

Question : 

A sum of Rs. 4.75 lakhs was invested in Company Q in 1999 for one year. How much more interest would have been earned if the sum was invested in Company P?

Solution: 

Difference = Rs. [(10% of 4.75) - (8% of 4.75)] lakhs
  = Rs. (2% of 4.75) lakhs
  = Rs. 0.095 lakhs
  = Rs. 9500.

Question : 

An investor invested Rs. 5 lakhs in Company Q in 1996. After one year, the entire amount along with the interest was transferred as investment to Company P in 1997 for one year. What amount will be received from Company P, by the investor?

Solution: 

Amount received from Company Q after one year on investment of Rs. 5 lakhs in the year 1996

= Rs. [5 + (6.5% of 5)] lakhs

= Rs. 5.325 lakhs.

Amount received from Company P after one year on investment of Rs. 5.325 lakhs in the year 1997

= Rs. [5.325 + (9% of 5.325)] lakhs

= Rs. 5.80425 lakhs

= Rs. 5,80,425.