-104 rEOTATlON I'OS 'COMMEECIXL EXPLOITABTIItT, 



sum of arit'bmetic capitalise these figures. The highest capitalised 

 Talue gives us the reqniired solution. Suppose, for instance, that 

 •the periodic -receipts determined experimental!}' are as follow.: — 



At 20 Tears £16 



„ 25 '„ £24 



„ SO „ £37 



„ 35 „ £48 



,>40 £58 



The capital corresponding to eaich of these iSgaares can be 



obtained from tlie formula. 



R 



Where '0=the capitalised value sought. 



R=the revenue to be capitalised. 



and « = the no. of years at the end of which 



the revenue is periodically obtained. 



t=;the interest on £ 1. 



Take in the present instance 4 per cent as the rate of interest: 



Then 1=0.04 



and C, i. e, the capital capable of yielding every twenty years 



an income of £ 16 



16 

 = = £ 13-8—11 



(14-0.04)?!l 



In the same manner, C at 25 years = „ 14-8 — 2 



30 ...=,,16-9—10 



35 ... =„ 16-5—10 



40 ...=,,15-5—2 



The highest capitalised value here, viz., £ 16-10-0, is obtained 

 at the end of the 30th year, which is tantamount to saying that the 

 age of Commercial Exploitability for the forest in question is 30 years. 



If the customary rate of interest for forest investments was 

 3 per cent we would have the following figures for the capitalised 

 values : — 



At 20 years £ 19—15—0 



„ 25 „ „ 21—18—9 



,. 30 „ „ 25-18—2 



,, 35 „ „ 26— 9—2 



„ 40 „ „ 25—12-7 



Here then the maximum capital would be realized at the age 

 of 35 years. 



