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. Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 6.6% every year for the loan. If no payments are made and no further borrowing occurs between them for seven years, then how much money will Emma's friend owe her? 0 $1,462.00 O $166.00 O $1,564.23 O $1,070.36 Now, assume that Emma's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 6.6% compounded annually, all other things being equal, how much money will Emma's friend owe her in seven years? O $103.24 O $1,462.00 O $1,564.23 O $1,066.00 Emma has another investment option in the market that pays 6.6% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Emma have in seven years if she invests $1,000 in this fund? O $166.00 O $1,581.27 $111.26 0 $1,067.65