When the interest is calculated annually, simple interest and compound interest are equal for the first year.

Answer

To solve the question, we need to compare the Simple Interest (SI) and Compound Interest (CI) for the first year when calculated annually. Let's go through the steps:

### Step-by-Step Solution:

1. **Define the Principal Amount (P)**:
- Let's assume the principal amount is \( P = 100 \) rupees.

2. **Define the Rate of Interest (R)**:
- Assume the rate of interest is \( R = 5\% \).

3. **Define the Time Period (T)**:
- We are calculating for \( T = 1 \) year.

4. **Calculate Simple Interest (SI)**:
- The formula for Simple Interest is:
\[ SI = \frac{P \times R \times T}{100} \]
- Substituting the values:
\[ SI = \frac{100 \times 5 \times 1}{100} = 5 \text{ rupees} \]

5. **Calculate the Amount for Compound Interest (CI)**:
- The formula for the amount when calculating Compound Interest is:
\[ A = P \times \left(1 + \frac{R}{100}\right)^T \]
- Substituting the values:
\[ A = 100 \times \left(1 + \frac{5}{100}\right)^1 = 100 \times 1.05 = 105 \text{ rupees} \]

6. **Calculate Compound Interest (CI)**:
- The formula for Compound Interest is:
\[ CI = A - P \]
- Substituting the values:
\[ CI = 105 - 100 = 5 \text{ rupees} \]

7. **Compare Simple Interest and Compound Interest**:
- From our calculations:
- Simple Interest (SI) = 5 rupees
- Compound Interest (CI) = 5 rupees
- Therefore, for the first year, Simple Interest and Compound Interest are equal.

### Conclusion:
The statement is true: When the interest is calculated annually, Simple Interest and Compound Interest are equal for the first year.