1) the total number of arrangements: 8!
2) excluding double counting (A1, A2 and A2, A1 are the same): 8!/2!*3! = 3360
3) the number of arrangements with C D is equal the number of arrangements with D C. Therefore, answer is 3360/2 = 1680.
Can you be more clear in your explanation with the step 3?
I considered C to the right of D, the combination together as one unit and there are 7 units to be arranged with 2 A's and 3 B's. Obviously, I was not even close to any of the options. What's wrong with my approach?
I don't think that by being on the right of D they mean C has to be right next to it. C can be anywhere. Therefore you can't "tie" them together and make it into 7 slots. You have to consider all 8 slots.