Chapter 4 Interest rate
Chapter 4 Interest Rate
Interest rate is the price of the money . Interest rates are the most pervasive element in the financial market .Interest works both ways You earn interest when you save and you pay interest then you borrow
•Interest rate is the price of the money. •Interest rates are the most pervasive element in the financial market. •Interest works both ways. •You earn interest when you save and you pay interest when you borrow
4. 1 The types of Interest Rates >fixed interest rates and floating interest rates >short-term interest rates and long-term interest rates >nominal real interest and real interest rates >market interest and managed interest
4.1 The types of Interest Rates Øfixed interest rates and floating interest rates Øshort-term interest rates and long-term interest rates Ønominal real interest and real interest rates Ømarket interest and managed interest
4.2 Calculating Interest Rate 42.1 simple interest(单利) 422 compound interest(复利
4.2 Calculating Interest Rate 4.2.1 simple interest （单利） 4.2.2 compound interest (复利)
4.2.3 Nominal versus real interest rates (名义利率和实际利率) Nominal interest rates - -measured in money as distinct from purchasing power Real interest rates -measures the increment in purchasing power asa percent of purchasing power loaned out Real interest rates Nominal interest rates inflation rate
4.2.3 Nominal Versus Real Interest Rates (名义利率和实际利率) Nominal Interest Rates ---measured in money as distinct from purchasing power. Real Interest Rates ---measures the increment in purchasing power as a percent of purchasing power loaned out. Real Interest Rates = Nominal Interest Rates – inflation rate