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

question 87

Multiple Choice

Juan has $1,000 that he would like to invest in a CD. His bank offers two alternatives, a one-year CD paying 6% or a two-year CD paying 9% per annum. 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%. 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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Definitions:

Defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.

Capacity

In legal terms, the ability of an individual or entity to enter into a contract, often requiring them to be of legal age and sound mind.

Substantive Unconscionability

A principle in contract law where a contract or a specific term is so unfairly one-sided that it is deemed unconscionable and unenforceable.

Procedural Unconscionability

Refers to a situation in contract law where the manner in which a contract was formed is unfair or oppressive, often due to unequal bargaining power or lack of choice.