Dana Zorowski has recently started her accounting career and her 25th birthday is coming soon. She has been told that now is the ideal time to begin to prepare for retirement. She has determined that she would like to retire with a pension that will pay $50,000 per year in retirement benefits after she retires with the expectation that the retirement fund should last for 20 years. To meet her pension retirement benefit goals, how much should she deposit annually for the next 40 years in a retirement investment fund that earns 8%? Assume all retirement deposits and benefit payments occur at the end of each year.

12) Cocopedia Inc. is planning to issue bonds that will pay 6% semiannual interest and mature in 10 years.

a. How much will investors be willing to pay for a $1,000 bond if the prevailing market yield rate is 4%?

b. How much will investors be willing to pay for a $1,000 bond if the prevailing market interest rate is 8%?

Answer rating: 100% (QA)

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