QUESTION 5 You are considering buying a new car. You are going to borrow $12,986. If you can negotiate a nominal annual interest rate of 12 percent (i.e. 12% equals the APR) and you wish to pay for the car over a 5-year period, what are your monthly car payments? QUESTION 6 What is the present value of five payments of $195. Assume the first of the five payments occurs immediately and the appropriate discount rate is 10%. QUESTION 7 You have the opportunity to buy a perpetuity that pays $1,000 annually. Your required rate of return on this investment is 16.6 percent. What is the Present Value of the perpetuity (i.e. its current value)