8 FOREST FINANCE 



"PROVIDED THAT THE RATE OF INTEREST IS HIGH, THE HAP- 

 PENINGS OF A MORE DISTANT FUTURE ARE IMMATERIAL TO THE 

 INVESTOR." 



The following is a synopsis of the preceding formulae, wherein : — 



p equals rate of interest. 



n " number of payments. 



m " duration of periodical intervals between two payments. 



a " years after which a periodical rental is due for the first time. 



R " rentals or payment. 



V " pre- value. 



N " aft- value. 



No capitalist and no forester is forced to adopt a financial formula or 

 equation when determining the merits of an investment. THE EQUATION 

 MERELY ILLUSTRATES A LOGICAL MANNER OF FINANCIAL THINK- 

 ING, WHICH IS GENERALLY ADOPTED BY THE INSURANCE COMPAN- 

 IES, BANKERS, AND FAR-SIGHTED BUSINESS MEN. 



PARAGRAPH III.— INCREASING OR DECREASING PRICES. 



Stumpage prices are rising in America, — possibly at the rate at which 

 the population increases, possibly faster, — promising to reach the present 

 European level within a few decades of years. Consequently, stumpage now 

 worth "S" dollars per thousand feet will be worth at "x%" rise, after "n" 

 years, SXl. Ox". 



The present value of such stumpage, to be harvested after "n" years, is 

 discounted backwards at "y" per cent, and amounts to 

 SXl. Ox° 



1. Oy" 



