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1. Catherine Wilhelm invested $10,000 today in a fund that earns 8%. How much will the investment be worth in 3 years? How much will
1. Catherine Wilhelm invested $10,000 today in a fund that earns 8%. How much will the investment be worth in 3 years? How much will it be worth in 3 years if it compounds semi- annually? 2. Miles Burman's lifelong dream is to own his own fishing boat to use in his retirement. He recently came into an inheritance of $400,000. He estimates that the boat he wants will cost $350,000 when he retires in 5 years. How much of the inheritance must he invest at an annual rate of 12% (compounded annually) to buy the boat at retirement? 3. Suppose Mark Glardino also wants a fishing boat that will cost $350,000 when he retires in 5 years, and he invests quarterly over the next 5 years, for an annual interest of 12%. If the interest compounds quarterly, what payment will he need to make each quarter to reach his goal? 4. Igra, Inc. issues a $1,000,000, 7% bond due in 10 years with interest payable each year. The current market rate of the bonds is 8%. What is the issue price of the bonds? 5. Stephanie Walton will invest $5,000 a year for 20 years in a fund that will earn 12% annual Interest. How much will be in the fund in 20 years? 6. Joe Dilascio decides he wants to buy a Dodge Charger today for $30,000. He agrees to make payments each month for the next 5 years at a 5 % interest rate (even though I told him not to go buy a new carl) What will his monthly payment be? Fiorella's Ferrari Company issues a $500,000, 10%, 3 year bond on January 1, 2021, that pays interest semiannually. The market rate of interest is currently 12%. Compute the issue price of the bond, prepare the effective interest method chart, and all journal entries necessary for this bond until its retirement. 1. Solve for the issue price of the bond. 2. Prepare the effective interest method chart. 3. Prepare all necessary Journal entries
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