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There are many factors influencing the cost of money for both individuals and corporations. Suppose you deposit money in an interest bearing account and at the same time borrow a bit of money from the same bank.

There are many factors influencing the cost of money for both individuals and corporations. Suppose you deposit money in an interest bearing account and at the same time borrow a bit of money from the same bank.

  • In which account would the bank apply quarterly compounding factors versus simple interest?
  • Explain your choices and your reasoning. You may want to check your personal accounts in regard to this type of transaction.

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