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

CHAPTER XIV EARNINGS AND INCOME §1 In the last chapter it was shown that, perfect foresight being assumed, the value of any capital good is derived from its future income by discounting the value of that income. It now remains to compare the capital-value thus derived with the expected income-value on which it depends. It is evident at the outset that the capital-value is less than the total expected income; for the discounted value of any future sum is necessarily less than that sum itself. This fact is illustrated in the third and fourth columns of the following table of capital and income in the cases of five typical articles: — To CAPITAL- CAPITAL- CAPITAL | NET INCOME PER YEAR I ora VALUE (INT. | VALUE (INT. NCOME AT 5%) AT 23%) | Land $1000 per year for- | | Infinite $20,000.00 | $40,000.00 ever House | $1000 per year for | 50 years. -. . .| $50,000.00 | 18,300.00 | 28,400.00 Horse $100 per year for 6 years . . 600.00 508.00 551.00 Suit of | $20 1st year; $10 | clothes { 2d year . . . 30.00 28.00 29.00 Loaf of | $36.50 per year, for bread day 10 10 10 In this table we observe that the value of the land, when interest is at 5 per cent, is $20,000, whereas the total in- come to be expected from it is infinitely greater; that the 227

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