The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Capital and income

Collection:: Economics Books

204 NATURE OF CAPITAL AND INCOME [CHar. XIII stant a year hence; B”, that two years hence; B’’, three years hence; and B®, ¢ years hence. AB represents any present value, A’ B' the “amount” of this sum one year hence, A”B’ the “amount” two years hence, etc. Consequently, AB also represents the present value of A’B’ due one year hence, or of A”B” due two years hence, or of A®B® due t years hence. The curve AA® is an “ exponential curve,” this being the name given to a curve which ascends in geo- AD) B B! BY BW B(t) Fic. 1. metrical progression, 7.e. ascends so that the successive vertical lines, AB, A’B’, A”B”, and A""'B'" (ordinates), taken at equal intervals, increase in length at a uniform ratio. We shall, however, for economic purposes, christen this curve the “discount curve.” §2 The principles which have been explained for obtaining the present value of a single future sum apply to many commercial transactions, especially to the valuation of bank assets, which exist largely in the form of “discount paper,” or short-time loans of other kinds. The principles also apply, though in combination with those of risk and for- eign exchange, to that form of property called “hills of

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