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

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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.)

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