We will take another Web Field Trip this week for your Assignment. Visit the following web site: http://www.bloomberg.com/markets/rates/ You will find an amazing amount of information about GLOBAL interest rates. It will open to the United States. NOTE: For this link to operate properly, you may need to open it outside the classroom page, by opening a new browser window. Copy/paste the above address to a new page and go there outside of class. Explore, learn and really study the material contained on this page. This was built as a discussion thread, so you can do your assignment and still see what other students are finding and talk about it as a group. Share your findings. Discuss the content. You will see for example, an item called a “Yield Curve.” Here is the one from the day this page was created for the U. S. Treasury Rates. The north and south axis (the X axis) measure interest rates. The east and west (the Y axis) measures the term (time) of the bond. You are seeing here that a bond with a term of 3 months pays much lower interest than a bond with a life of 30 YEARS. That make sense, although it is not always true, believe it or not. Do some research on the internet regarding an “inverted yield curve.” See what you can find and discuss it here. Do not make this overly complex. We are studying bonds this week; they pay INTEREST. Through this online field trip you will get exposure to interest rates around the world. Take the journey, do some independent research and post a report here telling us what you learned. Feel free to also share your personal experiences with INTEREST rates. They affect you too — in your credit cards, car loans, home mortgages, and what you earn on your savings. The topic is Interest RATES; let’s all find out all we can about them and share those findings here. You can start with and stay with the Bloomberg website, or you can “Google it” and explore on your own. Just remember: I want YOUR words. Tell us all about interest rates and discuss the topic as a class. During your explorations, investigate the role of the Federal Reserve regarding interest rates, too.

Interest Rate

The world economic system must deal with the interest rates because most of the countries borrow money from the World Bank. The funds that are adopted must be taken back with some interest. The world economic system of each state dictates the interest rate. This article examines the interest rates of countries and how it works as well as the terms and conditions. It is critical to understand the meaning of interest rate before elaborating more on end. The interest rate is the percentage of the principal charge by the lender for the usage of the money. The principal is the cash or the value that is lent. People can give money form the banks and even countries can borrow money for the well-established banks in the world. For example, the World Bank can lend the money for states (Jha, 2011).

The interest rate is practical for the entire due portion of one’s loan or acknowledgment card balance. It’s significant to distinguish what the interest rate is and in what way it enhances to outstanding individual debts. For instance, if one pays less than price, the debt will upsurge however payments are made. Though the interest rates are competitive, they are not similar. Bank charges advanced interest rates if it speculates that there are minimal chances that the debt will get reimbursed (Jha, 2011). Some kinds of finances, similar to credit cards, are continuously allocated advanced interest rates as they are exclusive to accomplish. Banks apply greater charges to risky persons because they are not trusted to repay back. This elaborates why it is critical to note the credit score of an individual and the methods to improve it. The higher the score, the lower the interest rate one will pay. The banks will charge the interest rate depending on the loan which can either be mortgage and the unpaid bill. In most countries, the interest rates are set by their central banks. This is usually determined by the economic growth.

Reference

Jha, S. (2011). Interest Rate Markets + Website: a Practical Approach to Fixed Income. Hoboken: John Wiley & Sons.

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