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1. Simple versus compound interest Aa Aa Financial contracts involving investments, mortgages, loans, and so...

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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. Olivia deposited $1,000 at her local credit union in a savings account at the rate of 7.8% paid as simple interest. She will earn $178.00 interest once a year for the next nine years. If she were to make$1,965.93 no additional deposits or withdrawals, how much money wouldO $1,702.00 the credit union owe Olivia in nine years? O $1,084.08 Now, assume that Olivia's credit union pays a compound interest$1,965.93 rate of 7.8% compounded annually. All other things being equal, $1,078.00 how much will Olivia have in her account after nine years? O $153.34 O $1,702.00 Before deciding to deposit her money at the credit union, Olivia checked the interest rates at her local bank as well. The bank was paying a nominal interest rate of 7.8% compounded quarterly. If Olivia had deposited $1,000 at her local bank, how much would she have had in her account after nine years? O $168.51 o $2,004.20 O $178.00 $1,080.31

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