Average: 3 Attempts: 1. Simple versus compound interest Financial contracts involving investments, mortgages, loans, and so on are based on ether a fixed or a variable AaAa interest rate. Assume that fixed interest rates are used throughout this question olivia plans to loan $1,800 to her friend, who will pay a simple interest rate of 9.8% every year for the loan. If no payments are made and no further borrowing occurs between them for five years, then how much money will olivia's friend owe her? O $2,682.00 $276.40 O $2,872.66 O $1,993.69 Now, assume that olivia's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 9.8% compounded annually, all other things being equal, how much money will Olivia's friend owe her in five years? O $2,682.00 O $2,872.66 O $281.52 O $1,976.40 Olivia has another investment option in the market that pays 9.8% nominal interest, but it's compounded quarterly Keeping everything else constant, how much money will olivia have in five years if she invests $1,800 in this fund? O $276.40 O $314.30 O $2,920.87 O $1,982.99