A bank is paying 5% rate of interest on new savings account annually. A student loans the bank $300 (Investor). 1) What is the amount of ordinary interest the bank must pay to the student? 2) What is the amount the student will receive for the annual investment? The bank above takes the money and loans it out. They loan the $300 out (not totally realistic ... banks cannot lend out 100% of deposits). The rate charged to the borrower is 15% rate of interest annually. 3) How much does the bank earn on the $300? 4) What is the amount owed to the bank at the maturity of promissory note? 5) What was the student's ROI? Why is it equal to the time value of money? 6) What was the bank's ROI? Compute Interest on a 60 day loan of $300 if the rate of interest is 8%. 7) At Ordinary Interest? 8) At Exact Interest? 9) What is the amount of the difference between the two calculations? 10) Why is there a difference between the two calculations