Which will pay an interest rate of 8 the first year 5 the, Financial Management

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Which will pay an interest rate of 8 the first year 5 the

Suppose that you are considering investing $1,000 in one of the following bank CDs:

? CD 1, which will pay an interest rate of 5% per year for three years

? CD 2, which will pay an interest rate of 8% the first year, 5% the second year, and 3% the third year Which CD should you choose?

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Financial Management: Which will pay an interest rate of 8 the first year 5 the

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Financial Management: Which will pay an interest rate of 8 the first year 5 the

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