Present value. A smooth-talking used-car salesman who smiles considerably is offering you a great deal on a "pre-owned" car. He says, "For only 8 annual payments of $2,700, this beautiful 1998 Honda Civic can be yours." If you can borrow money at 8%, what is the price of this car? Assume the payment is made at the end of each year. If you can borrow money at 8%, what is the price of this car? $ (Round to the nearest cent.) Perpetuities. The Canadian Government has once again decided to issue a consol (a bond with a never-ending interest payment and no maturity date). The bond will pay $30 in interest each year (at the end of the year), but it will never return the principal. The current discount rate for Canadian government bonds is 11%. What should this consol bond sell for in the market? What if the interest rate should fall to 10% ? Rise to 12% ? Why does the price go up when interest rates fall? Why does the price go down when interest rates rise