1. What is the present value of a $700 perpetuity if the interest rate is 5%? Round your answer to the nearest cent. $ If interest rates doubled to 10%, what would its present value be? Round your answer to the nearest cent. $
2. You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 7% with interest paid monthly. What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent. $ What will be the loan's EAR? Do not round intermediate steps. Round your answer to two decimal places. %