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Interest Rates, Investments, and Capital Markets

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Presentation on theme: "Interest Rates, Investments, and Capital Markets"— Presentation transcript:

1 Interest Rates, Investments, and Capital Markets
Chapter Sixteen Interest Rates, Investments, and Capital Markets

2 Table 16.1 Interest and the Frequency of Compounding
© 2007 Pearson Addison-Wesley. All rights reserved.

3 Table Future Value, FV, to Which $1 Grows by the End of Year t at Various Interest Rates, i, Compounded Annually, $ © 2007 Pearson Addison-Wesley. All rights reserved.

4 Table Present Value, PV, of a Payment of $1 at the End of Year t at Various Interest Rates, i, Compounded Annually, $ © 2007 Pearson Addison-Wesley. All rights reserved.

5 Figure 16.1 Present Value of a Dollar in the Future
© 2007 Pearson Addison-Wesley. All rights reserved.

6 Table Present Value, PV, of a Flow of $10 a Year for t Years at Various Interest Rates, i, Compounded Annually, $ © 2007 Pearson Addison-Wesley. All rights reserved.

7 Application (Page 558) Durability of Telephone Poles
© 2007 Pearson Addison-Wesley. All rights reserved.

8 Figure 16.2 Annual Earnings of High School and College Graduates
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9 Table 16.5 Present Value of Earnings
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10 Figure 16.3 Price of an Exhaustible Resource
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11 Table 16.6 Price and Quantity of Coal Reflecting the Amount of Coal and the Interest Rate
© 2007 Pearson Addison-Wesley. All rights reserved.

12 Figure 16.4 First-Year Price in a Two-Period Model
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13 Application (Page 567) Redwood Trees
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14 Figure 16.5 Capital Market Equilibrium
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15 Figure 16.6 How Government Borrowing Squeezes Out Private Investment
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