1. Megan wants to retire 25 years from today. She plans to invest in a mutual fund that earns 9.5% per year and she plans to contribute $15,000 per year, starting one year from today. She will make 25 annual contributes. Calculate her retirement account balance 25 years from today. (Round to 2 decimals)
2. Essex Biochemical Co. has a $1,000 par value bond outstanding that pays 14 percent annual interest. The current yield to maturity on such bonds in the market is 9 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Compute the price of the bonds for the maturity date
a) 40 years
b) 17 years
c) 5 years