type of interpolation in line chart

Assuming I understand your scenario (an example chart + data set in a spreadsheet would help illustrate this kind of question), then I would say that the "default" method of drawing the lines on the chart is indeed to assume that the available points are connected by straight lines, so the "missing" points are linearly interpolated.

If you go into the "format data series" dialog and select the optional "smoothed" line toggle, you can have the points connected by a smooth "spline" curve.