116 PRELnriNAHY MATTERS. 



of the State and the nature of the forests. On the whole, 

 however, this is a safe way of determining the rate of interest 

 for the forest industry in all well regulated States. 



The rate of interest generally adopted in the calculations 

 contained in the following chapters is that of British Consols, 

 that is to say, 2^ per cent. 



Sectiok III. — Formulae of Compound Interest.* 



The following formulae, based upon compound interest, are 

 required in forest valuation : — 



1. Amount, or the Futun- Value, to uhleh a Capital 

 accumulates. 

 A capital C\ put out at p per cent, compound interest accu- 

 mulates in the course of n years to the value — 



C'„ = C„ X I'Op- . . . (I.) 

 or log. (',, = log. t\ + » X log. I'Qp, 



.here 10,, = 1£J-+J' and 10,," = (10,,," = C^^')- 



2. Discount, or Determination 0/ Present Value. 

 The present value C, of a capital €„ to be realised n years 

 hence, is — ^, 



('., = T^„ • • . . (H.) 

 1 07^" 



log. C = log. ('„ — n X log. I'O^). 



3. Snnwtatio)i of Rentals. 

 ((. Futwe Value. 

 A rental H becomes due for the first lime after 111 years, and 

 is payable altogether ?? times at intervals of in years; its value 

 at the end of m X n years is — 



(■-.. = ^^^^fr^' • • (HI.) 



1 Oj/" — 1 



* For the benefit of those who are not vciscd in calculations with compound 

 interest, the detaiLs, showing how the formulae have been obtained, are given in 

 Appendix VI. 



