394 NATURE OF CAPITAL AND INCOME

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taken to represent the purchase period.” Thus, if the rate of
interest is 4 %, the purchase period is twenty-five years. During
one year the radius vector will move through an angle 5 of a

 

 

 

Fic. 49.

complete revolution, and the length of the radius vector will
increase from OA to OB by an amount, BC, i of the original
0A, interest being 4% reckoned annually. In case the interest
 BO is not reinvested, but detached from the principal, next