Manuel wants to invest an inheritance of $21,000 for one year. His credit union offers 4.09% for a one-year term or4.04% for a six-month term.(a) How much will Manuel have after one year if he invests at the one-year rate?(b) How much will Manuel have after one year if he invested for six months at a time at 4.04% each time?(c) What would the one-year rate have to be to yield the same amount of interest as the investment described in part(b)?(a) After one year, Manuel will have $(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places asneeded.)(b) One year after the initial investment, Manuel will have $.(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places asneeded.)(c) The one-year rate to yield the same amount of interest as the investment described in part (b) is %.(Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places asneeded.)

Part A inheritance amount =21000 1year term interest =4.09% Future value after one year…

ne year, Manuel will have $ e final answer to the nearest cent as needed. Round all interm mar after the initial investment, Manuel will have $ e final answer to the nearest cent as needed. Round all interr

ne year, Manuel will have $ e final answer to the nearest cent as needed. Round all interm mar after the initial investment, Manuel will have $ e final answer to the nearest cent as needed. Round all interr

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 6E

See similar textbooks

Related questions

Q: h investment as an equation, and then arrange the investments in ascending order (from least to…

A: Future value includes the interest on investment and the principal amount.

Q: Consider the following investment project. Calculate the net future worth of this investment at 11%…

Q: Starratt Alexander is currently considering investing specified amount in each of four in vestment…

A: Future Value is the amount in the deposited account at the end of the maturity period. During the…

Q: ou are offered an investment that will pay you GH¢ 200 in one year, GH¢ 400 the next year, GH¢ 600…

A: Present value = Future value * (1+rate)^years

Q: If you place $25,500 into an 80-day short-term GIC at TD Canada Trust earning 0.55% simple interest,…

A: Maturity value = Amount invested + Interest earned

Q: Kershaw wishes to accumulate $2 million by the end of 40 years by making equal annual end-of-year…

A: Amount to be saved(FV) is $2million Time period(NPER) is 40 Years Rate is 10% To Find: Amount to…

Q: An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $400…

A: Present value is the current worth of the future payments to be made at a specified interest rate.…

Q: You plan to invest $1,000 for one year and you have the opportunity to invest it at a 12 percent…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Consider a property that is expected to produce a constant net operating ind year in perpetuity. An…

A: Future Value is calculated by FV function in excel, where PV is current price, NPER is number of…

Q: An engineering student decides to accumulate $500,000 by her sixt pects to start by investing a…

A: Explanation of Concept:- Annual worth concept which is been used in the present problem states that…

Q: Nick has been offered a unique investment opportunity. If Nick invests $10,400 today, Nick will…

A: Net Present Value, commonly known as NPV is defined as the difference between the PV of cash inflows…

Q: An investment will pay S100 at the end of each of the next 3 years, $200 at the end of Year 4, 300…

Q: John has an investment opportunity that promises to pay him $16,000 in four years. He could earn a…

A: Year PV factor @ 6% Remarks 1 0.94340 = 1 / 1.06 2 0.89000 = 0.9434 / 1.06 3…

Q: Use the savings plan formula to answer the following question You put 5350 per month in an…

A: The money's temporal value principle illustrates that the money has a higher worth today as compared…

Q: An investment will generate $9,000 a year for 20 years. If you can earn 9 percent on your funds and…

A: “Since you have asked multiple questions, we will solve the one question for you. If you want any…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: The present value is the present market price of a certain amount which is carrying the expected…

Q: Horry is depositing $979.34 into an investment account at the end of every month. After 5 yeors and…

A: Deposits means the amount paid by the person in a specific account or an investment. When a person…

Q: An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $350…

A: Present value is the current value of the future payments at a given rate of interest. Future value…

Q: You have been offered an investment in Brian, Jesse, and Lisa. Each investment pays $1,000 at the…

A: payout at the end of 3rd year 1000 payout ever year 80

Q: what is its present value? Its future value?

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: One sate investment pays 10% per year, and a more risky investment pays 18% per year. A woman who…

A: Interest is an income which is received from invested amount. It increase the investor’s wealth.…

Q: An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300…

Q: Your friend is considering investing $10,000 starting at the end nvestment account and this cash…

A: This is problem of future value of growing ANNUITY and can be done using formula. Future value of…

Q: Chris offers you an investmet where if ou investment where if you invest $1,000 today, he'll return…

A: The rate of return can be calculated as: R= (Maturity amount- Initial investment)/ Initial…

Q: An individual is investing in a market where spot rates and forward rates apply. In this market, if…

A: Bonds are the debt securities which are issued by corporations or the government to arrange the…

Q: Comparing Two Alternatives Suppose that April has accessto an investment that will pay 10% interest…

A: Investment opportunity is the opportunity which helps an investor in earning the returns. An…

Q: An individual expects his return on an investment to be $10,000 the first year and to increase…

A: Therefore, the present worth is $57,595.10.

Q: You Ai between two mitually exclusive nestment deiding oppectuntes.Beth Require the same ahal…

A: Net Present Value is defined as the difference between the PV of the cash inflows and also the PV of…

Q: Let's say you have the opportunity to invest in a project that will require you to invest…

A: Net Present Value(NPV) is amongst one of the modern techniques of capital budgeting which considers…

Q: will have a loss of P10,000 each year. Calculate the acceptability of this investment using FW…

A: Future worth of a project can be defined as value of a current asset or project at some future date.…

Q: An investor has developed projections for an investment that will generate the following stream of…

A: The future value of cash flows will be reflective of the compounded value of investment in the…

Q: Sonia wants to have $13,000 in 10 y much she should invest now (in $) at semiannually in order to…

A: Here we can use the following formula A=P1+rnnt Where "A" is the ending amount. *P" is the…

Q: How much would you be willing to pay for this investment if you required a 8 percent rate of return?…

A: Value of an investment is the discounted value of cash flows, at the rate of required rate of…

Q: Mr. Y wishes to find out the value of investment which return Ksh. 10,000 forever, discounted at 10…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: An individual decides to invest in one of two projects, A and B, which both require the same initial…

A: Here, Initial outlays of both Projects A and B = $10,000 Yields from Project A = $11,500 Number of…

Q: Assume the total cost of a college education will be $365,000 when your child enters college in 18…

A: The future value of a cash flow is the future worth of a cash flow at a certain rate of interest and…

Q: an investor, Erik, is offered the investment opportunities described in the table below. Each…

A: Risk averse means a person who takes risk for additional return. Risk loving means a person who…

Q: Danny creates up an investment arrangement for friend that will return $5000 the first year, $6125…

A: Given: Return in 1 year =$5000Return in 2 year =$6125Return in 3 year =$7250no of years return…

Q: Walt is evaluating an investment that will provide the following returns at the end of each of the…

A: Present Value is the current value of a cash flow that can be occurred in future. To find the…

Q: much she should invest now (in $) at 6% interest, compounded semiannually in order to reach this…

A: We have to calculate semiannual interest and semiannual periods and get from table present value…

Q: Assume the totol cost of a college educotion will be $200,000 when your child enters college in 16…

A: Future value required (FV) = $ 200,000 Investment amount (PV) = $ 55,000 Period (t) = 16 Years

Q: Metaz is planning to invest OMR 3500 every year for the next six years in an investment paying 12…

A: As per company policy it is only possible to solve one question in case of multiple question.

Q: You want to create an endowment income of $35,000 per year for Oxfordshire Charity, bit the first…

A: The amount that should be invested today is the present value of all future endowment payments.…

Q: owing investment. (Round your answers to the nearest cent.)

A: The Future Value Formula FV=PV(1+i)n Where: FV = future value PV = present value i = interest rate…

Q: Abhy is thinking about purchasing an investment from XYZ investments. If she buys the investment,…

A: "Hi, Thanks for the question. Since you posted multiple question, we will answer first question for…

Concept explainers

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.

Question

Manuel wants to invest an inheritance of $21,000 for one year. His credit union offers 4.09% for a one-year term or
4.04% for a six-month term.
(a) How much will Manuel have after one year if he invests at the one-year rate?
(b) How much will Manuel have after one year if he invested for six months at a time at 4.04% each time?
(c) What would the one-year rate have to be to yield the same amount of interest as the investment described in part
(b)?
(a) After one year, Manuel will have $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as
needed.)
(b) One year after the initial investment, Manuel will have $.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as
needed.)
(c) The one-year rate to yield the same amount of interest as the investment described in part (b) is %.
(Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as
needed.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Hashim wants to invest an amount of OMR. 9500 every year to buy a house at the end of 12 years. For this purpose, he wants to invest some money in a saving bank but does not know the exact amount of money he will get after 12 years a) What amount will he receive assuming an interest rate of 3.005%? b) What amount will he receive assuming an interest rate of 6.50%? c) Suggest the option which will be enough to meet his house which is estimated to be OMR. 100000?
Craig decides to purchase a property that has been valued at $475,000. He has $80,000 available as a deposit and will require a mortgage for the remaining amount. The bank offers him a 25 year mortgage at 2% interest. Calculate the total interest he will pay over the life of the loan, assuming he makes monthly payments. Give your answer in dollars to the nearest ten dollars.
Alex will need $9860 per year for four years to support his daughters university tuition (first tuition is paid at the beginning of the 11th year). How much will Alex have to invest at the beginning of each year for the 10 years before his daughter begins her studies if their savings earn compound interest at 6 percent per year? A)$2,378.49 B)$2,593.46 C)$2,697.47 D)$2,400.74 E)$2,544.78
Craig decides to purchase a property that has been valued at $480,000. He has $90,000 available as a deposit and will require a mortgage for the remaining amount. The bank offers him a 25 year mortgage at 2% interest. Calculate the total interest he will pay over the life of the loan, assuming he makes monthly payments.
Jack is expected to receive an inheritance of about $350,000 from his grandmother’s estate in a few months’ time. He is eyeing to buy a 1-bedder condominium so that he can stay on his own. The price of the property is $1,500,000. He is offered a 30-year mortgage loan of $800,000 at an interest rate of 1.3%. (i) Compute the monthly instalment of the mortgage loan. (ii) Analyse and discuss how the Mortgage Servicing Ratio (MSR) and Total Debt Service Ratio (TDSR) will impact his plan to purchase the $1m condo.
Kenneth is expected to receive an inheritance of about $250,000 from his grandmother's estate in a few months' time. He is eyeing to buy a 1-bedder condominium so that he can stay on his own. The price of the property is $1,000,000. He is offered a 30-year mortgage loan of $750,000 at an interest rate of 1.3%. (1) Compute the monthly instalment of the mortgage loan. (ii) Analyse and discuss how the Mortgage Servicing Ratio (MSR) and Total Debt Service Ratio (TDSR) will impact his plan to purchase the $1m condo.
Kenneth is expected to receive an inheritance of about $250,000 from his grandmother's estate in a few months' time. He is eyeing to buy a 1-bedder condominium so that he can stay on his own. The price of the property is $1,000,000. He is offered a 30-year mortgage loan of $750,000 at an interest rate of 1.3%. (i) Using BGN mode for calculation, Compute the monthly instalment of the mortgage loan.
Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is $125,000. What is the maximum amount that Meredith can contribute? Show your calculations using Microsoft Excel. 2. Assume that Meredith’s AGI is $100,000. She plans to put $6,000 each year into her Roth IRA, hoping to earn 6% annually. What future value will accumulate in her Roth at the end of 20 years? 3. In part (b), instead assume that Meredith puts the $6,000 into the Roth for 15 years at 6%. How much will accumulate at the end of this period?
Stephanie inherited $40,000. She wants to put some of the money in a certificate of deposit that pays 2.1% interest per year and the rest in a mutual fund account that pays 6.5% per year. How much should she invest in each account if she wants to earn 5.4% interest per year on the total amount?
Frances plans to save money for a down payment on a house using an investment account that pays an interest rate of 5.3% per year. She wants to have $425, 000 available five years from today. Frances intends to deposit an amount today and at the end of each of the next five years into her investment account (i. e. she will make a total of six deposits, all of the same amount). How much will each of these deposits be? (Enter your answer to two decimal places)
Charles wants to retire in 17 years. At that time he wants to be able to withdraw $22,000 at the end of each year for 19 years. Assume that money can be deposited at 5% per year compounded annually. What exact amount will Charles need in 17 years?
Bill Padley expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Padley earn?