1. Simple Interest versus Compound Interest 1.1. City Bank pays 7 percent simple intcrest on its savings account balances, whercas Standard Bank pays 7 percent interest compounded anmually. You deposited $6,000 in cach of these banks. How much more money would you earn from your Standard Bank account at the end of nine years? 12. Al wifaq Finance Company pays 9% simple interest on its deposit account balance, whereas First Gulf Bank pays 6% intcrest compounded annually. You have AED 50,000 to deposit for a period of 25 years. In which bank will you deposit if you are expecting highest return on your deposit? Show your calculation to justify your answer 1.3. Emirates Finance House pays 7% simple interest on its deposit account balance, whereas Mashreq bank pays 6% interest compounded annually. You have AED 80,000 to deposit for a period of 20 years. In which bank will you deposit if you are expecting highest return on your deposit? Show your calculation to justify your answer. 2. Calculating Future Values 2.1. For cach of the following, compute the future value: Present Value Years Interest Rate Future Value 2.500arInterest Rate 8,400 76.600 180.000 | 12% 9% 13% 7% 14 9 | 2.2. You have just made your you earn an 1I percent rate of retun and make no additional contributions, what wilt account be worth when you retire in 40 years? Wha (Does this suggest an investment strategy?) first $5.000 contribution to your retirement account. Assuming t if you wait 10 years before contributing? 2.3. What is the future value of $2.600 in 10 years assuming an interest rate of 8 percent compounded semiannually 2.4. What is the future value of $2.600 in 10 years assuming an interest rate of 8 percent compounded quarterly? 2.5 Mr. Miser, who is 35 years old, has just inherited $21.000 and devides to use the windfal : towards his retirement. He places the money in a bank that promises a return ofs% per year :::: until his planned retirement 25 years. If his funds earn 8% interest compounded annually how much will he have at retirement? Repeat the analysis for semi-annual compounkding