a have credit card debt of $37,500 that has an APR (monthly compounding) of 18%. Each month you pay the math Aonthly payment. You are required to pay only the outstanding interest. You have received an offer in the mail for an otherwise identical credit card with an APR of 10%. After considering all your alternatives, you decide to switch cards, roll over the outstanding balance on the old card into the new card, and borrow additional money as well. How much can you bay? (Note: Be caroful not to round any intermediate steps less than six decimal places.) You can borrow 5 on the new card without changing the minimum monthly payment you will be required to pay. (Round to the nearest dollar.) 10. Assume that in 1974 , interest rates were 7.261% and the rate of inflation was 13.205%. What was the real interest rate in 1974? How would the purchasing power of your savings have changed over the year? The real rate of interest in 1974 was havo (1) by (Round to three decimal places.) (1) decreased increased 11. If the rate of inflation is 4.2%, what nominal interest rate is necessary for you to earn a 2.5% real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.) The nominal interest rate is \%. (Round to two decimal places.) 12. Suppose the term structure of risk-free interest rates is shown below. What is the present value of an investment that pays $100 at the end of each of years 1,2 , and 3 ? If you wanted to va this investment correctly using the annuity formula, which discount rate should you use? The present value of the investment is $ (Round to the nearest cent.) To value this investment correctly using the annuity formula, use the discount rate (Round to five decimal places.)