Bank of America is currently selling a security that will pay $300 one year from today, $400 2 years from today and $800 at some undisclosed time in the future.Find the time at which the $800 payment is made if the interest rate is 11% and BofA is selling the security for $1000.Round this number of years (from part a) to the nearest year. Assuming that the last payment is made at the end of the year you found (after rounding), find the future value of the security at that time (you can ignore the $1000 price of the security). Assume the interest rate is 11%.

Given: Year 1 payment = $300 Year 2 payment = $400 Not known year payment = $800 Interest rate = 11%

Answered: Bank of America is currently selling a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

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Bank of America is currently selling a security that will pay $300 one year from today, $400 2 years from today and $800 at some undisclosed time in the future.

Find the time at which the $800 payment is made if the interest rate is 11% and BofA is selling the security for $1000.
Round this number of years (from part a) to the nearest year. Assuming that the last payment is made at the end of the year you found (after rounding), find the future value of the security at that time (you can ignore the $1000 price of the security). Assume the interest rate is 11%.

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