Which of the following four situations would show linear growth of money?
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3% of simple interest is added to the amount after every year.
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Money is increased by 3% of the amount that was in the previous year.
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Amount is doubled after every 3 years.
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2% of compound interest is added to the amount after every year.
Linear growth occurs when a constant amount is added at each step. Simple interest adds a fixed percentage of the principal every year, which is a constant amount, thus representing linear growth. Compound interest and exponential growth involve adding a percentage of the current total, which leads to non-linear growth.
Linear growth occurs when a constant amount of interest, calculated solely on the initial principal, is added each period, which matches simple interest. Options describing compound interest or exponential doubling do not represent linear growth because they calculate interest on the accumulated amount. Therefore, adding 3% of simple interest to the amount after every year shows linear growth of money.