Unformatted text preview: i.e. life insurance or mortgage • PVA= PMTxPVIFA • PVIFA= (1-1/(1+i)^n)/i • PMT= payment • Interest up, price of bond down…interest down, price of bond up • Higher interest rates lead to capital losses to a lot of people which leads to recession • As interest increases investment decreases and when interest declines investment increases...
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This note was uploaded on 05/16/2008 for the course ECON 0005 taught by Professor Abdullah during the Fall '07 term at Tufts.
- Fall '07