218 NATURE OF CAPITAL AND INCOME [Cmar. XIII 
value of this series at the point of time O is found by 
adding together the present value of the separate items. 
The best way to exhibit this is to begin at the last income 
payment, A’”B"’. Just after this last installment, of 
course, the property is valueless; that is, its capital-value is 
sero. Just before this installment the capital-value is equal 
to the installment itself, and is represented by A" BY. At 
      
om 
in 
AT A 
  
o 
> 
>= 
Fic. 4. 
any time in the interval between this installment of income 
and the next preceding installment, the value will evidently 
be found by following the discount curve B"'C",C" being 
vertically over A”. The height A"C" is, therefore, the 
capital-value of the property just after the payment A”B". 
Its capital-value just before this payment is found by adding 
the vertical line C”D”, equal to the installment of income 
AB’. From D’ in turn we proceed backward along the 
discount curve D"C'to C’, at which point A’C’ represents the 
capital-value of the property just after the installment A’B’. 
To this is added, if we pass back an instant, an amount 
CD’ equal to the installment A’ B’. The result is A’, 
the capital-value just before said installment. From IY, in