162 THE FINANCIAL RESULTS OF FORESTRY. 



2. Determination of the Rate of Interest yielded by the Capital 

 invested in Forestry, called the Forest Per cent. 



a. Calculation for the Intermittent Working. 



Under the intermittent working the rate of interest changes 

 from year to year, because the capital, as well as the increment, 

 change with the advancing age of the wood ; hence it is neces- 

 sary to distinguish between the current annual and the mean 

 (or average) annual rate of interest. 



i. CURRENT ANNUAL RATE OF INTEREST. 



The current annual rate of interest is equal to the net annual 

 value increment of a wood divided by the cost value of the wood 

 at the commencement of the year in question. The current 

 annual per cent, is equal to that quotient multiplied by 100. 



Let: 



Y m be the utilization value of a wood at the end of the year m, 



* m+l >j j >j j> 7/1+1, 



then 



-^m+l ~~ *j 



represents the increase in value which has been laid on during 

 the year m + l. Deducting from this e, the annual costs, the 

 net increase is equal to 



V V P 



* m+l * 



The cost value of the wood at the end of the year m (or 

 beginning of the year m + 1) is represented by : 



(a) the value of the soil with compound interest to the 



year m = 



S c xl'op m . 



(b) the cost of formation with compound interest to the 



year m 



c x l'op m . 



(c) The value of the annual costs during m years with 



