2. 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. Addison plans to loan $1,100 to her friend, who will pay a simple O $203.40 interest rate of 9.4% every year for the loan. If no payments are $2,237.40 made and no further borrowing occurs between them for 11 $1,213.12 years, then how much money will Addison's friend owe her? O $2,955.18 Now, assume that Addison's friend volunteers to pay compound O $2,955.18 interest instead of simple interest for her loan. If interest is O$2,237.40 accrued at 9.4% compounded annually, all other things being O $277.79 equal, how much money will Addison's friend owe her in 11 O $1,203.40 years? Addison has another investment option in the market that pays 9.4% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Addison have in 11 years if she invests $1,100 in this fund? $314.34 $3,056.74 $203.40 O $1,207.10 O00