If you already have a good computer, that much money could outfit an entire home music recording studio with decent gear, especially if you buy good used gear, which is easily available:

A couple of good super-budget guitars from Harley Benton (a Strat clone and a Les Paul clone), for about $300 (new).

A good Yamaha acoustic guitar, $100.

A bass, $75.

An interface, to get the music into the computer, $50.

A basic MIDI controller, $30.

A good electronic keyboard with weighted keys, $100.

Microphone, $75.

Headphones, $50.

Electronic drum machine, $50, or use the pads on the MIDI controller, or voices on the keyboard.

DAW - Reaper is free, and works great.

That's approximately what I spent on my studio, and everything works great, and sounds terrific..