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3. Which of these situations would you prefer? (a) You invest $2,500 in a certificate of deposit that earns an effective interest rate of 8%

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3. Which of these situations would you prefer? (a) You invest $2,500 in a certificate of deposit that earns an effective interest rate of 8% per year. You plan to leave the money alone for 5 years, and the general price inflation rate is expected to average 5% per year. Taxes are ignored. (b) You spend $2,500 on a piece of antique furniture. You believe that in 5 years the furniture can be sold for $4,000. Assume that the general price inflation rate is 5% per year. Again, taxes are ignored. Use FW values in your comparison

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