Zwei Bücher zur socialen Geschichte Englands

The nature of capital and income

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Monograph

Identifikator:: 1891000233

URN:: urn:nbn:de:zbw-retromon-260008

Document type:: Monograph

Author:: Held, Adolf http://d-nb.info/gnd/116681667

Title:: Zwei Bücher zur socialen Geschichte Englands

Place of publication:: Leipzig

Publisher:: Duncker & Humblot

Year of publication:: 1881

Scope:: XIV, 775 Seiten; 1 Portrait

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Erstes Buch. Soziale und politische Literatur von 1776-1832.

Collection:: Economics Books

CHAPTER XIII VALUE OF CAPITAL §1 Having found what constitutes a rate of interest, we are now enabled to pursue our study of the relation between capital and income. We found in Chapter XI that these rela- tions are of four kinds, according to whether the income and the capital are measured in quantity or in value. The fourth of these, ““value-return,” brought us to the concept of a rate of interest. The rate of interest acts as a link between income-value and capital-value, and by means of this link it is possible to derive from any given income-value its capital-value, 1.e. to “capitalize’’ income. To do this, we assume that the expected income is fore- known with certainty, and that the rate of interest (in the sense of an annual premium) is foreknown, and also that it is constant during successive years. With these provisos it is very simple to derive the capital-value of the income to be yielded by any article of wealth or item of property; in other words, to derive the value of that wealth or prop- erty. That value is simply the present worth of the future income from the specified capital. This is true whether the income accrues continuously or discontinuously; whether it is uniform or fluctuating; whether the install- ments of income are few or infinite in number. We begin by considering the simplest case, that, namely, in which the future income consists of a single item accru- ing at a definite instant of time. If, for instance, one holds a property right by virtue of which he will receive, at the end 202

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