Interest Rates: History And Overview One may think of 'interest rates' as merely a concern of cutting edge modern economic news. Indeed, the rate of interest has been the obsession of the business media of recent weeks. One March 21, 2005 Business Week article proclaimed, "Pop! Goes the Auto Bubble -- with oil prices and interest rates rising! (Mandel, 2005) But in actual fact interest rates are simply the percent at

NPV This becomes more complicated when trying to determine the changes that would occur to the net present value of today's dollars, especially given the uncertainties involved with changes in the interest rate. On the one hand, the value of future dollars (i.e. today's dollars saved) is eroded by inflation, so a lower interest rate is detrimental to NPV; on the other hand, higher interest rates mean more lucrative lending and

Car Sales and Interest Scenario Analysis A finance manager employed by an automobile dealership believes that the number of cars sold in his local market can be predicted by the interest rate charged for a loan. The finance manager performed a regression analysis of the number of cars sold and corresponding interest rates and identified a direct correlation, with fewer cars sold as the interest rates increased. This case study assesses

Money Interest Rates important individuals businesses making decisions finance purchases. The articles deal assessing conditions finance purchases important aspects policy. Allen, Bruce. Interest Rates The high unemployment and inflation rates are some of the most important factors that threaten to affect the stability of the U.S. economy. As a consequence, the Federal Reserve is forced to orient its strategy towards reducing the money supply. There are several methods and tools that the

There are two other things to consider. The first is that Fed policy can be assumed to be built into the markets. Prices in liquid markets are based on the best possible public information. Therefore, if I know about the pending change in the interest rates, that is public knowledge and will already be priced into the market rates. Any speculation I may have about interest rate changes is

Interest rates form the basis for valuation models around the world. They are used in almost every industry, country, and geography. Interest rates can also influence corporate and consumer behaviors. For example, depending on the inherent risk of a consumer, credit card rates determine how much an individual must pay on a month basis to the financial institution. Corporations looking to borrow funds to expand their market share must consider