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CHAPTER 7

CHAPTER 7. Interest Rates and Bond Prices. Payment Today $1,000. Future Value 1,060. Compounding: The Future Value of Money Lent Today. Value Today $1,000. Future Payment 1,060. Discounting: The Present Value of Money to Be Received in the Future. Supply. Interest Rate (Percent). 6.

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CHAPTER 7

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  1. CHAPTER 7 Interest Rates and Bond Prices

  2. Payment Today $1,000 Future Value 1,060 Compounding: The Future Value of Money Lent Today

  3. Value Today $1,000 Future Payment 1,060 Discounting: The Present Value of Money to Be Received in the Future

  4. Supply Interest Rate (Percent) 6 E1 Demand $500 Loanable Funds (in Billions) The Supply of and Demand for Funds

  5. A Shift in the Demand for Funds Interest Rate (Percent) SS 8 E2 6 E1 D'D' DD $500 $600 Loanable Funds (in Billions)

  6. SS Interest Rate (Percent) S'S' 6 E1 4 E2 DD $500 $550 Loanable Funds (in Billions) A Shift in the Supply of Funds

  7. Inflation and Interest Rates: A Graphical Treatment Interest Rate (Percent) S’S’ SS 10 E2 6 E1 DD D'D' $500 Loanable Funds (in Billions)

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