What is the value of a derivative that pays off $100 in six months if the S&P

Question:

What is the value of a derivative that pays off $100 in six months if the S&P 500 index is greater than 1,000 and zero otherwise. Assume that the current level of the index is 960, the risk-free rate is 8% per annum, the yield on the index is 3% per annum, and the volatility of the index is 20%.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...