Compounding Interest and the Banker

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Compounding Interest and the Banker

Need by 23 Oct 2015 by 2300hrs EST in 300-500 words only

 

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.

 

You may use the following book as a reference: Parrino, R., Kidwell, D. S., Bates, T. (09/2014). Fundamentals of Corporate Finance, 3rd Edition. [VitalSource Bookshelf Online]. Retrieved from http://kaplan.vitalsource.com/#/books/9781118901656/
 
Need by 23 Oct 2015 by 2300hrs EST in 300-500 words only

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