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Your broker would like to sell you a security (S) that will pay you $485...

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Finance

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Your broker would like to sell you a security (S) that will pay you $485 each year for the next 7 years (payments at Years 1-7) and will cost you $2,213.42 to purchase. A competing broker would ke you to purchase a different security (S2) that will pay you $195 a quarter for the next 8 years Quarters 1-32) and has promised you an effective annual rate of return that will be 1.6 percent higher(160 basis pointsl than the effective annual rate of return on the first security. Given this information, determine how much you should have to pay for this second security in order to earn this higher effective rate of return. $3,803.09 $3,814.59 $3,826.16 $3,837.78 $3,849.46

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