«5 FOREST FINANCE 



III. Literature. 



The only book on forest finance written in English is Scblich's Vol. Ill, 



Part n. 



The interest tables of the various insurance companies may be used to 

 solve forestal equations, in preference to tables of logarithms. 



PARAGRAPH II.— MATHEMATICAL PRINCIPLES 

 OF FINANCE. 



The ratio existing between principal invested (V) and amount obtained 

 (N), or the ratio between "pre-value" and "aft-value'' of an investment is 

 expressed by the following equations [in which (p) represents the rate of in- 

 terest and (n) the number of years covered by the investments]: — 



N = VXl. Op" (A) 



K 



V = (B) 



1. Op"* 

 N 



1. Op° = (C) 



V 

 By payments (a) regularly occurring at given intervals of time a "geom- 

 etrical progression" is formed after the pattern 

 a + ar + ar^ + ar^ + ar* + ar(n - 1) 

 The summary of this geometrical progression is 

 r-L- 1 

 a—— (D) 



r — 1 



If the last term of the progression is expressed as "1" (with the view to 

 the elimination of "'n"), the summary is 

 r 1 — a 



r — 1 

 "rl" might be designated as "the term beyond the last", or as the term 

 "before which the progression stops". 



Similarly, the sum total of periodical payments (R) due at intervals of 

 (m) years, for the first time due after (a) years and altogether (n) times is, 

 considered as a pre-value, 



1. Op™"— 1 1. Opm-a 



R X (E) 



1. Op"" — 1 1. Op""" 



On the other hand, for the aft-value of such periodical payments (R), 

 the sum total is 



1. Op"™ — 1 



R Xl. Op°>-a (F) 



1. Op" — 1 ^ ^ 



In the case of an annuity, (m) and (a) are equal to 1. Consequently, 

 the summary of such annuities considered as a pre-value is 



