Sec. 8] VALUE OF CAPITAL 219 
turn, the capital-value descends along the discount curve 
to C, where CD, equal to AB, is added, and from D we 
proceed finally by discount curve to P, vertically over O. 
OP is, therefore, the capital-value of the property at the 
“present ” instant, and its value at any succeeding in- 
stant is shown by following the course of the broken line 
PDCD'C'D"C”B'"" A’ * This curve must descend to zero 
  
  
B 
Fig. 5. 
finally, when the income is exhausted, and it usually 
shows a tendency to decrease before this last payment 
is reached. = 
If, in a series of income items, a negative one occurs, 1 is 
only necessary to reverse the capital curve, as shown in 
Figure 5, where the first installment, AB, is outgo instead 
of income. The curve PB’ evidently represents the be- 
havior of capital-value, rising suddenly as the outgo AB 
is passed and falling when the income A’B’ is received, 
and so on to the end. 
We may, if we choose, 
security from the time immediately be 
consider the purchase price itself as an outgo. 
a for the capital-value of any series 
dix to Chap. XIII, § 11. 
trace the history of the value of a 
fore its purchase, and 
If this price 
1 For the mathematical formul 
of income installments, see Appen