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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Capital and income

Collection:: Economics Books

Sec. 11] VALUE OF CAPITAL 225 still be regarded as the discounted value of an income which is indefinitely postponed, but indefinitely great. Of course, such a limiting case is of purely theoretical interest. The prodigious sums which result from the reckoning of compound interest always surprise those who have never made such computations. One dollar put at compound interest at 4 per cent would amount, in one century, to $50, in a second century to $2500, in a third century to $125,000, in a fourth century to $6,500,000, in a fifth century to $325,000,000, and in a sixth century to $16,000,000,000. Beyond this the figures are almost unthinkable in magnitude.' Yet we have few instances in which any one has endeav- ored to set aside even one dollar for the benefit of posterity six centuries removed! There is too much reluctance to build for the remote future, even though the attainable results are enormous. Benjamin Franklin, at his death in 1790, left £1000 to the town of Boston and the same sum to Philadelphia, with the proviso that it should accumulate for a hundred years, at the end of which time he calculated that at 5 per cent it would amount to £131,000. In the case of the Boston gift, it actually amounted, at the end of the century, to $400,000, and has since accumulated to about $600,000. The sum received by the city of Phila- delphia has not increased nearly as fast. Another interesting case of accumulation is that of the Lowell Institute in Boston, which was founded by a bequest of $200,000 in 1838, with the condition that 10 per cent of the income from it should be reinvested and added to the principal. The peculiarity of this provision is that it applies in perpetuity. There is, therefore, theoretically no limit to the future accumulation thus made possible. The fund, after sixty-seven years, amounts already to $1,100,000. It must be remembered however that practically even a 1 For a geometrical representation, see Appendix to Chap. XIII, § 16. Q

Access restriction

Copyright

fullscreen: The nature of capital and income

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation