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How much must he invest today

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Q1. Pearl Willis will invest $33,900 today. She needs $203,400 in 17 years. What annual interest rate must she earn?

Q2. Steve Fillmore's lifelong dream is to own his own fishing boat to use in his retirement. Steve has recently come into an inheritance of $408,600. He estimates that the boat he wants will cost $330,300 when he retires in 4 years. Assuming quarterly compounding of amounts invested at 12%, how much of Steve Fillmore's inheritance must be invested to have enough at retirement to buy the boat?

Q3. Tony Quincy wants to withdraw $38,600 each year for 12 years from a fund that earns 9% interest. How much must he invest today if the first withdrawal is at year-end? How much must he invest today if the first withdrawal takes place immediately?

Q4. Sandhill Inc. issues $1,800,000 of 7% bonds due in 11 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Sandhill receive when it issues the bonds?

Reference no: EM133057479

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