APPENDIX TO CHAPTER XIII

 
  
 
 
  
  
  
   
 
   

§ 13 (ro Cm. XIII, § 8)
Diagram showing the Accumulated ‘‘Amount’’ of a Given Income Stream
We reproduce in Figure 46 the diagram with which we began
the study of the general case of capitalizing income. We now

wish to obtain the accumulated value A''(Q), at the close of the
period OA", of the income items AB, A'B', A"B",and A"'B'"".

 

 

 

 

 

0 A AY Of AN AY
Fia. 46.
This consists of : (1) amp itself ; (2) BE, which is the amount die

of C"D'" (or its equal, A"B'""), and is found by continuing the
discount curve C'D" to E; (3) EF, which in like manner is the
amount of C'D' (or its equal A'B'); and (4) FQ, which is the
amount of CD (or its equal AB). Thus, while OP represents