1. Simple versus compound interest Aa Aa 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 Sheila plans to loan $1,100 to her friend, who will pay a simple interest rate of 6.2% every year for the loan. If no payments are made and no further borrowing occurs between them for five years, then how much money wl Sheila's friend owe her? $1,485.99 $1,441.00 O $1,172.43 $168.20 Now, assume that Sheila's friend volunteers to pay compoundO $1,485.99 interest instead of simple interest for her loan. If interest is accrued at 6.2% compounded annually, all other things being equal, how much money will Sheila's friend owe her in five years? O $1,441.00 O $92.13 O $1,168.20 Sheila has another investment option in the market that pays 6.2% nominal interest, but it's compounded quarterly Keeping everything else constant, how much money will Sheila have in five years if she invests $1,100 in this fund? O $98.52 O $1,169.80 $168.20 O $1,496.21