POSSIBLE PROCEDURES IN FIXING RATES 183
lead and are therefore of value to the appraiser and to the property
 owner, as well as to the rate-regulating authority.
Tables 11 and 12 illustrate forcefully the fact that under the
Equal Annual Payment Method the amount to be earned annually
 from the beginning of operations is uniform and that under
the Straight Line Method the amount of earnings should be
greatest at the beginning.
TABLE 11. STRAIGHT LINE METHOD
(Hypothetical)
Cost of plant $100. Probable life ro years. Interest 6 per cent. No
distinction is made between probable and actual life. The annual amortization
 or depreciation increment is $10.
Accrued depre- Present value, re-Year.
 ot andor dining investment Interest on rate- Ss ine
zation - . .
year. ginning of year.
$10 $100 $6.00 $16.00
20 go 5.40 15.40
30 8o 4.80 14.80
| 40 ”"y 4.20 14.20
Cv | to 3.60 13.60
60 i 1.00 13.00
on . 2.40 12.40
so : : 1.80 11.80
: 90 24 I.20 11.20
13 100 Iv 0.60 10.60
TABLE 12. EQUAL ANNUAL PAYMENT METHOD
(Hypothetical)
Cost of plant $100. Probable life 10 years. Interest 6 per cent. No
distinction is made between probable and actual life.
Present value
Annual depre- Accrued depre- ininc ip A 1 J
Yer amortiation  amoripaton ‘Stmentorrate. Intereston Ame amor
increment. at end of year. bate &2 begins Interest.
$7.59 $7.59 $100.00 $6.00 $13.59
8.04 15.63 92.41 5.55 13.59
8.53 24.15 84.37 5.06 13.59
9.04 33.19 75.85 4.55 13.59
9.58 32.77 66.81 4.01 13.59
10.15 52.92 57.24 3.43 13.59
10.76 63.68 47.08 2.83 13.59
1I.41 75.09 36.32 2.18 13.59
12.09 87.18 24.91 1.50 13.59
12.82 . 100.00 12.82 0.77 13.59