Juan Has $1,000 That He Would Like to Invest in a CD.His

question 10

Essay

Juan has $1,000 that he would like to invest in a CD.His bank offers two alternatives,i.e.,a one-year CD paying 6 percent or a two-year CD paying 9 percent.Juan has been reading that interest rates are rising and,based on his research,he estimates that by year-end the rate on one-year CDs will increase to 10 percent.What alternative would give Juan the most interest and what would the total interest be?
(a)Two one-year CDs returning $120 interest
(b)Two one-year CDs returning $160 interest
(c)One two-year CD returning $180 interest
(d)One two-year CD returning $1,900 interest

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The environment or context in which something takes place or is positioned.

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