If you can borrow the money at 8 per cent, can you afford the new system? Q-25 EAR value NIR You have just concluded the purchase of a new warehouse. To finance the purchase, youve arranged for a 20-year mortgage fro 80 per cent of the $400 000 purchase price. The monthly payment will be $3000.What is the NIR on the loan? The effective annual rate? Q-38 Present value of a property Given an interest rate of 6 per cent per year, what is the value at date t = 7 of a perpetual stream of $100 payments coming at dates t = 12, t = 13, t = 14 and so on to infinity? Tutorial 3 Q-1 Bond values Hope Instruments has a bond issue outstanding that pays $6 annually. It has a face value of $100 and will mature in eight years. Similar bonds are priced to yield 9 per cent. What would you expect this bond to sell for?