An economist has estimated that, near the point of equilibrium, the demand curve and supply curve for 1 year bonds can be estimated using the following equations:

Demand: Price = (-0.5)*Quantity + 930

Supply: Price = Quantity + 500

Assume the face of the bond is $1,000.

1. What is the expected equilibrium price and quantity of bonds in this market to 4 decimal places?

Price

$

Quantity

2. Given your answer to part (a), which is the expected interest rate in this market as a percentage to 2 decimal places?

%