Question

A security promises to pay out $200 at the end of each year for the following...

A security promises to pay out $200 at the end of each year for the following four years, plus additional $300 at the end of year 4. If your required annual interest rate earned on the security is 8%, how much are you willing to pay for the security? Round your answer to two decimal places.

Homework Answers

Answer #1

Solution :

The amount that I should be willing to pay = $ 882.93

Please find the attached screenshot of the excel sheet containing the detailed calculation for the above solution

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