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金融市场3understand interest rate【荐】.pdf
Part II Principles of Financial Markets
uUNDERSTANDING INTEREST RATES Chapter 3
uBEHAVIOR OF INTEREST RATES Chapter 4
uTHE RISK AND TERM STRUCTURE OF INTEREST
RATES Chapter 5
uTHE THEORY OF EFFICIENT CAPITAL MARKETS
Chapter 6
3-1
School of Management in HUST
The Time Value of MoneyThe Time Value of Money
andand The Interest RateThe Interest Rate
Which would you prefer -- $10,000
today or $10,000 in 5 years?
Obviously, $10,000 today.
You already recognize that there is
TIME VALUE TO MONEY!!
3-2
School of Management in HUST
Why TIME?Why TIME?
Why is TIME such an important
element in your decision?
TIME allows you the opportunity to
postpone consumption and earn
INTEREST.
3-3
School of Management in HUST
Why Compound Interest?Why Compound Interest?
Future Value of a Single $1,000 Deposit
)
s
r 20000
a
l
l
o 10% Simple
D
15000
. Interest
S
U. 7% Compound
( 10000
e Interest
u
l 10% Compound
a 5000
V
e Interest
r
u 0
t
u 1st Year 10th 20th 30th
F
Year Year Year
Millionaire example of
3-4 c
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