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Hi sir,
I am not able to understand in part a) it says 4% overdraft than I get this number 125000*0.04= 5000 but they put this 5000 in cost. But I thought we should put this 5000 in savings why they put in cost Instead of saving?? Can you please explain me
If they pay early then the overdraft increases. That means that they pay more interest and that is a cost.
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