Interest rates in the economyIt is an experience that competence in mathematics, both in numerical manipulations and in understanding its conceptual foundations , improves a person's ability to manage the more ambiguous and qualitative relationships that dominate daily financial decision-making (Greenspan). This quote is from Allan Greenspan, the chairman of the Federal Reserve who was arguably the most powerful man in the world. Greenspan was also extremely financially smart. Having financial knowledge is essential to surviving in today's financial world. It's even more important to learn about interest rates because they play a huge role in our economy. I believe that higher interest rates will improve the economy. Higher interest rates make it more difficult to borrow money, which increases the value of the dollar and decreases inflation. Interest rates are the cost of borrowing money, expressed as a percentage, usually over a period of one year. A few items that have interest rates are mortgages, automobiles and credit cards. An interest rate is the amount a borrower must pay to the lender in addition to the amount borrowed. Over the past ten years, interest rates have gone up and down like a roller coaster. According to a Federal Reserve report, interest rates over the past decade have not remained stable for more than a year. In 1990, interest rates were at a record high, around eight percent, almost double the current amount. From 1991 to 1994, rates fell to well below 3 percent. From late 1994 until the turn of the millennium, interest rates rose to and remained between five and six percent. Middle of paper ......tedBaker, Jeremy. Telephone interview. November 14, 2005. Board of Governors of the Federal Reserve. Selected interest rates. November 10, 2005. November 14, 2005. CNN Money. November 15, 2005. November 15, 2005. Easterling, ed. Unexpected Returns: Understanding Secular Stock Returns. Cypress House, 2005. Effect of economic data on rates. Chart. Why do mortgage rates change? By Meyers Internet. 2005.FunAdvice.com. Ed. Merriman Capital Management. November 21, 2005. November 21, 2005.< http://www.fundadvice.com/FEhtml/InvestingBasics/fed.html>.Greenspan, Allan. Interview. Smart quote. Krugman, Paul. “Bernanke and the Bubble.” NY Times October 28, 2005. Friday Sec. A: 9 p.m. November 15, 2005. Maybury, Richard. U.S. and Global Early Warning Report. November 2005. November 14, 2005. Moeckl, Matt. Telephone interview. November 14, 2005.Why interest rates change. December 1, 2005. December 1. 2005. .