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Demand of Bonds Point Price of bond Interest rate (i) Demand A $925 (1000 - 925)/ 925 = 8.1% $100 billion B $800 (1000 - 800)/ 800 = 25% $400 billion Table 2: Supply of Bonds Point Price of bond Interest rate (i) Demand A $925 8.1% $400 billion B $800 25 % $100 billion Draw the demand and supply schedules for bonds using: X- axis : $Amount Y- axis: Interest rate find out the equilibrium interest rate and dollar amount. Interpret this graph using the Loanable funds theory. Discuss various factors that

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