MEAN EATE OF INTEREST. 165 



than p, unless exceptional conditions produce once more a 

 sudden rise in the current annual forest per cent. 



The second occasion occurs in the year when the expecta- 

 tion value of the soil reaches its maximum. Hence the formula 

 for the current annual forest per cent, can he used to gauge 

 the financial ripeness of a wood, as will be shown further 

 on. 



ii. MEAN ANNUAL RATE OF INTEREST. 



The mean (or average) rate of interest is ascertained by 

 converting all net returns into an equal annual rental and 

 dividing it by the producing capital. That quotient multiplied 

 by 100 gives the mean annual forest per cent. 



The best time for making the calculation is the commence- 

 ment of the rotation. At that time the annual net rental is 

 represented by the expression : 



__ x . 



- 



\ l'op r -l -op 



The producing capital at the commencement of the rotation 

 is equal to the cost value of the soil = S c . Hence the mean 

 annual forest per cent, under the intermittent working is : 



/r,+r.x i-gp^+. . .+T a xi-o P '--cx i-ofr^ x 



V i'of- 1 L _xlOO 



meane 



an Pf=- e xp. 



S c 



If 8>8 m then p f >p. 



If the expectation value of the soil is equal to the cost value, 

 then the mean annual forest per cent, is equal to the general 

 per cent, p, which proves the correctness of the above formula. 



The highest mean annual forest per cent, is obtained under 

 that rotation for which the expectation value of the soil 

 culminates ; it is then equal to the current annual forest per 

 cent, (see fig. 41). 



