POSSIBLE PROCEDURES IN FIXING RATES 183
TABLE 13. COMPARISON OF METHODS OF PROCEDURE
(Hypothetical)
Annual investment $100. Probable life of all parts of the property 10
years. Interest 6 per cent. No distinction is made between probable and
actual life.
i i - qs Unlimited Lif;
“fidthod 0 Pee ELEY" Sinking Fund Method, Unlimited Lit
Year. PE .
Rate- Rat
base be-| Required ones Required Relates Required base bel Required
nk earnings. of year. earnings. of year. earnings. Sonne earnings.
$100 $16.00 $100.00 $13.59 $100.00 $13.59 $100 $6.00
I90 31.40 192.41 27.17 200.00 27.17 200 12.00
270 46.20 276.78 40.76 300.00 40.76 300 18.00
| 340 60.40 352.63 54.35 400.00 54.35 400 24.00
400 74.00 419.44 67.94 500.00 67.94 3500 30.00
450 87.00 476.68 81.53 600.00 81.53 600 36.00
490 99.40 523.76 95.12 700 .00 95.12 700 42.00
520 111.20 560.08 108.69 800.00 108.69 | 800 48.00
540 122.40 584.99 122.28 900.00 122.28 goo 54.00
95 550 133.00 597.81 135.87 1000.00 135.87 1000 60.00
rT 650 149.00 697.81 149.46 1100.00 149.46 1100 166.00
: 740 164.40 790.22 163.05 1200.00 163.05 1200 172.00
Lj 820 179.20 874.59 176.63 1300.00 176.63 1300 178.00
t 8go 193.40 950.44 190.22 I400.00 190.22 1400 184.00
| 950 207.00 1017.25 203.81 1500.00 203.81 13500 190.00
Pa I000 220.00 1074.49 217.40 1600.00 217.40 1600 196.00
1040 232.40 IIII.57 230.99 1700.00 230.99 1700 202.00
: 1070 244.20 1147.89 244.56 1800.00 244.56 1800 208.00
19 1090 255.40 1172.80 258.15 1900.00 258.15 1900 214.00
20 I100 266.00 1185.62 271.74 2000.00 271.74 2000 220.00
21 | 1190 282.00 1278.03 285.33 2100.00 285.33 » 2100 ' 326.00
One more comparison may be of interest as shown in
Table 14.
TABLE 14. COMPARISON OF METHODS OF PROCEDURE
(Hypothetical)
The property is made up of numerous items of all possible ages, the
combined cost of which is $100. The probable life of each item is ro years.
All considerations are theoretical and no distinction is made between
actual and probable life. Interest 6 per cent. The property is supposed
to have reached its full growth and to be more than 10 vears old.
Raledese Annual de-Le-De
 Interest preciation R :
etka of pradize vars mtebue orreplace Cid
ment.
Straight line amortization method $55.00 $3.30 $10.00 $13.30
Equal annual payment amortizationmethod..
 ..... .. =ss" 59.78 3.59 10.00 13.59
Sinking fund replacement method 100.00 6.00 7.59 13.59
Unlimited life replacement method 100.00 | 6.00 | 10.00 : 16.00