Question: hello everyone, so i am using a HP 10 bii+ calculator to solve this question as of the moment, even though I believe I am
hello everyone, so i am using a HP 10 bii+ calculator to solve this question
as of the moment, even though I believe I am inputting the values, my answers are off and I am unsure of how it is right
can I ask for a proper way how to solve this question?
formula or question?
2. Simple versus compound interest Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Isabella plans to loan $1,300 to her friend, who will pay a simple interest rate of 7% every year for the loan. If no payments are made and no further borrowing occurs between them for 5 years, then how much money will Isabella's friend owe her? $1,397.37 $1,823.32 $1,755.00 $191.00 Now, assume that Isabella's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 7% compounded annually, all other things being equal, how much money will Isabella's friend owe her in 5 years? $127.63 $1,391.00 $1,823.32 $1,755.00 Isabella has another investment option in the market that pays 7% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Isabella have in 5 years if she invests $1,300 in this fund? $137.76 $1,839.21 $1,393.42 $191.00
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