best investment

best investment

1. Look again at Solved Problem 3.1A. Would the answer change if the second CD pays an interest rate of 1% the first two years and 10% in the third year? Briefly explain.
2. In this problem, suppose that in addition to the two CDs described in Solved Problem 3.1A, we have a third CD in which you might invest—one that pays an interest rate of 3% the first two years and an interest rate of 7% the third year. How does the future value of this investment compare to the other two? Which is the best investment?

best investment