RATE OF COMPOUND INTEREST 243 



land worth i an acre, returns 4^ per cent, compound interest, 

 and not 6 per cent, compound interest, as was yielded on a 

 small capital in a single 38-year -rotation ; for with a succes- 

 sion of 38-year rotations, it is only a small amount of the 

 capital that is re-invested at 6 per cent. ; the rest is calculated 

 at 4 per cent, the same rate as the value of the thinnings 

 and the cost of the outgoings is reckoned at. 



The above compares with 4^- per cent, compound interest 

 yielded by a single loo-year rotation ; and just over 4! per 

 cent, compound interest yielded by a succession of /o-year 

 rotations. 



In the above cases, the net credit sums at the end of the 

 looth year are : 



Thus, there is only a little difference between the financial 

 advantages of the 38- or /o-year rotations where monies 

 can be borrowed or lent at 4 per cent. ; but the disadvantage 

 of the long rotation of 100 years is very marked. 



The foregoing method of presenting the financial aspect 

 of planting operations, i.e., by stating the rate of compound 

 interest which it is anticipated may be yielded upon the 

 initial outlay, is, while quite correct in principle, open to 

 several grave objections, viz. : 



(1) The results obtained by long and short rotations are 



not directly comparable. 



(2) The general public do not fully comprehend all that 



compound interest involves ; they do not realise the 

 enormous difference in capital value, which a differ- 

 ence of per cent, makes at the end of a long term 

 of years ; and hence they may be misled. 



