Essay
Jack has $1,000 that he wishes to invest for the next two years.One-year CDs are currently paying 8 percent while two-year CDs are paying 12 percent.Economists are predicting that interest rates will rise by the end of the year.What is the minimum amount interest rates would have to increase to make the one-year CD better than the two-year?
(a)16 percent
(b)14 percent
(c)12 percent
(d)10 percent
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