TABLE; o? FORMULAE 17 



g. Change of Periodic to Yearly Payment. 



Where a forest property furnishes an income only every twenty 

 years it may be desirable to convert this periodic income into a year- 

 ly one. If this property, on account of the periodic income is worth, 

 or has a safe income value of : 



and the bank or trust company is willing to accept this as fact and 

 pay the owner a yearly interest on the full $60,000 at 3% ; the owner 

 of the forest would receive 0.03 X 60,000 = $1,800 per year. 

 This may also be stated as follows : 



$48000 = i8oo 

 I.03 20 i .03 



or the yearly income, 



$48,000 (0.03) 



1-03 i 

 In general then: 



'"able of Formulae. 



At c 



No. FORMULA. MEANING OF FORMULA. 



^ _ n / n . Prolongation of initial capital Co for n years at 



p per cent 



2 _ C Discount of final capital C n for n years at p 



i.op n per cent. 



3. C^ _ n Final capital Cn divided by initial capital Co to 

 ,C - find interest rate p. 



f n _ ^ Sum, or end value of a series of payments a 



4. Cn = S = >(I - op ^- coming every year continued for n years com- 



(i.op-^i) pounded at p per cent. 



Present value of a series of payments a com- 



* n N ing every year continued for n years com- 



Co _ an. op pounded at" p per cent and discounted at the 



(i. op i) i. op same per cent> fi rs t payment to come in one 



vear from now. 



