新编金融英语教程Chapter4InterestRate课件

1、Interest RateChapter 4Lead-inLanguage NotesKey PointsFollow-up Tasks4.14.34.24.4CONTENTSExtended Tasks4.54.1Lead-inThis chapter will first of all introduce the time value of money. Then it will explore the definition of interest rate. It will also discuss how the interest rate level is determined. B

2、ased on these, this chapter will examine the relationships among compounding and discounting. Finally, it will talk about the pricing of the interest rate. ￥$It is very likely that the willingness to postpone purchases into the future stems from the reward, namely the interest rate. Since the intere

3、st rate is the return on lending and the cost of borrowing, it plays a decisive role in spending, saving, borrowing, and lending decisions made in the present and bearing on the future. This concept is called the time value of money. Simply put, the interest rate represents the time value of money.T

4、ime Value of Money 4.2 Key Points4.2.1 Time Value of Money ￥$It is often defined as the proportion of an amount loaned, which a lender charges an interest to the borrower, normally expressed as an annual percentage. It is the rate a bank or other lender charges to borrow its money or the rate a bank

5、 pays its savers for keeping money in an account. The annual interest rate is the rate over a period of one year. Other interest rates apply over different periods, such as a month or a day, but they are usually annualized. Interest Rate4.2 Key Points4.2.2 Definition of the Interest Rate 4.2 Key Poi

6、nts4.2.3 Determination of the Level of Interest rate The governments net supply and/or demand for funds as modified by actions of the Federal Reserve Bank.（3）Three basic factors supply, demand, and government actions determine the real interest rate. The nominal interest rate, which is the rate we a

7、ctually observe, is the real rate plus the expected rate of inflation. So a fourth factor affecting the interest rate is the expected rate of inflation.（4）The supply of funds from savers, primarily households.（1）The demand for funds from businesses to be used to finance investments in plant, equipme

8、nt, and inventories (real assets or capital formation).（2）4.2 Key Points4.2.4 Compounding and Discounting Discounting: Present ValuesCompounding: Future ValuesCompounding is a method used to answer a simple question: What is the future value of money lent (or borrowed) today?Vn=V0 (1+i) ndiscounting

9、 is backward looking. It addresses this question: What is the present value of money to be received (or paid) in the future?V0=Vn/ (1+i) n20%30%10%20%20%Lowering interest rates can give the economy a short-term boost. Short-term political gainsPeople prefer to buy goods at a later time. As a result,

10、 there will often be a positive interest rate in a free market. Delayed consumption People prefer to have their resources available in a form that can be exchanged immediately rather than a form that takes time to materialize. Liquidity preference The borrower is obliged to compensate the lender for

11、 the shrinking of the moneys purchase power because of inflation. Inflation The lender will charge the borrower a risk premium so as to ensure that he will be compensated for a possible loss of money. Diverse investments 4.2 Key Points4.2.5 Pricing of the Interest RateTaxes, Banks, Economic state as

12、set set 财产compound rate kmpand 复利default df:lt 拖欠，违约discounting dskant 折现due dju: 到期的equilibrium i:kwlbrim均衡forecast f:k:st 预测，预估impetus mpts 动力offset fset 抵消option pn 选择pivotal pvtl 至关重要的premium pri:mim 保费，溢价principal prnspl 本金4.3 Language NotesI. Wordsamount repaid certificate of deposit (CD) comp

13、ounding frequency delayed consumption diverse investments government actions governments budget deficit interest rate investment risks IOU 4.3 Language NotesII. Phrases liquidity preference macroeconomic operation nominal interest rate original principalphysical capitalprincipalsumpurchasing powerre

14、al interest raterisk premiumtime valuethe U.S. Treasury 美国财政部unit of account计量单位1.An interest rate, as the amount of interest due per period, is calculated as a proportion of the amount lent, deposited or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends o

15、n the principal sum, the interest rate, the compounding frequency, and the length of time, over which it is lent, deposited or borrowed. 2. Lending in the present enables someone to spend in the future the sum of what is lent plus the interest earned.3. In normal situations, economists think that a

16、cut in interest rates will only provide a short-term impetus for the economy, which will soon be offset by inflation. 4. According to the theory of time preference, people prefer to buy goods now at a later time. 5. For this reason, it is natural for the lender to charge the borrower a risk premium

17、so as to ensure that he will be compensated for a possible loss of money.4.3 Language NotesIII. Sentences 4.4 Follow-up TasksI. Matching( )1.borrower A. 微观运行( )2. deposit B. 需求下降( )3. economic state C. 流动性( )4. inflation D. 贷方( )5. market economy E. 借方( )6. microeconomic operation F. 短期( )7. a downw

18、ard-sloping demandG. 经济状况( )8. lender H. 存款( )9. liquidity I. 市场经济( )10. short run J. 通货膨胀Directions: Match the English words and phrases in the left column with the proper Chinese equivalents in the right column. 4.4 Follow-up TasksII. JudgmentsDirections: Decide whether each of the following state

19、ments is true (T) or false (F). 1. The lender will charge the borrower a high-interest rate if he thinks it is very risky for him to lend his money to the borrower. ( )2. If a person, who has money, wants to make a purchase, he can do nothing but wait until he saves enough money for it. ( )3. Intere

20、st rate can be understood as the reward of lending or the cost of borrowing. ( )4. When the economy is poor, it can be made better by raising the interest rate. ( )5. The change of interest rates has an effect on the macroeconomic operation rather than the microeconomic operation. ( )4.4 Follow-up T

21、asksIII. Short Answer Questions Directions: Answer each of the following questions briefly.1. How to measure the time value of money?2. How to calculate the total interest of a certain money lent or borrowed?3. How will the change of inflation affect that of interest rates, when other factors are he

22、ld constant?4. How to manipulate the interest rate to restore the balance of payments?5. What factors may lead to interest rate changes?4.4 Follow-up TasksIV. Translation Directions: Translate the following Chinese paragraph into English.利率是指一定时期内利息额同借贷资本总额的比率。利率通常由一个国家的中央银行控制，是宏观经济调控的重要工具之一。当经济过热、通货膨胀上升时，便提高利率、收紧信贷；当过热的经济和通货膨胀得到控制时，便会把利率适当地调低。当前，世界各国频繁地使用利率杠杆来实施宏观调控。利率政策已经成为各国中央银行调控货币供求，进而调控经济的主要手段。因此，利率政策在中央银行货币政策中的地位变得越来越重要。A penny saved is a penny earned.English proverbTake care of the pence, and the pounds will take care of themselves.English proverbThe Feds abili