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How do I get the present value of interest. Present value formula of $1 = 1/(1+i)^n
for the principal present value say 100,000 i = 10% ; n = 5 1/(1.05)^5= .6139 * 100,000 = 61,391
4,000 is interest payment paid annually = 7.72173
what is the formula to find Present Value of interest of 7.72173?
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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