You want to buy a used car. The price is $6000, the vendor is offering you to pay by monthly installments of $550, which according to him corresponds to 10% interest (50$ per month). What is the NPV of this deal as a function of the discount rate? What is the effective annual rate of this loan? What needs to be your impatience for you to accept the terms of the loan if you anticipate the yearly inflation to be 5%? You want to buy a used car. The price is $6000, the vendor is offering you to pay by monthly installments of $550, which according to him corresponds to 10% interest (50$ per month). What is the NPV of this deal as a function of the discount rate? What is the effective annual rate of this loan? What needs to be your impatience for you to accept the terms of the loan if you anticipate the yearly inflation to be 5%