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Time Value of Money, continued No unread replies. No replies. This question has two parts: Universal Bank pays 7% interest compounded annually on time deposits.

Time Value of Money, continued No unread replies. No replies. This question has two parts: Universal Bank pays 7% interest compounded annually on time deposits. Regional Bank pays 6% compounded quarterly. Part 1. Based on EFFECTIVE interest rates, in which bank would you prefer to deposit your money for one year? Why? SHOW CALCULATIONS. Part 2. Could your choice of banks be influenced by the fact that you might want to withdraw your money during the year as opposed to the end of the year? Why or why not? Explain

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