Related to Solved Problem $3\mathrm{.}1$A$]$ Suppose that you are considering investing $$1,400$ in one of the following bank CDs$.$

CD $1,$ which will pay an interest rate of $4\%$ per year for three years

CD $2,$ which will pay an interest rate of $10\%$ the first year, $7\%$ the second year, and $4\%$ the third year

The future value of $CD1$ is $

and the future value of $CD2$ is $

$($Round your responses to the nearest cent.$)$

Given the future values you calculated, which CD should be chosen?

A$.$ CD $2$ should be chosen.

B$.$ CD $1$ should be chosen.

Now suppose for CD $2$ the interest rates stay the same but the order in which they are paid changes such that CD $2$ pays an interest rate of $4\%$ the first year, $7\%$

the second year, and $10\%$ the third year. What is the future value of new CD $2?$

The future value of new $CD2$ is $

$($Round your responses to the nearest cent.$)$

We also have a third CD in which you might invest$-$one that pays an interest rate of $2\%$ the first two years and an interest rate of $12\%$ the third year.

How does the future value of this investment compare to the other two?

The future value of $CD3$ is

than the future value of CD $1$ and

than the future value of $CD2.$

Which is the best investment?

The best investment is $CD$