1

10'.'
VALUATION
OF
rilOl'EllTY.
Book iV.
After 1 year
- - -i.1050
52-5 One year s iiitereKt on 1050.
After a years
. - -
1102-5
55-125
1102-5
After 3 years
. - -
1157-625
57-881
1157-625
After 4 years
-
- - 1215-506
60-775

1215-506
After 5
years
-
- - 1276-281 &c.
The method aliove exhibited would, however, in calculations for a number of years, become
very laborious, and it may be abridged in the following manner.
Let the present principal a
;
now, since a principal of 20/. will amount to 21/. al
the end of a year, the principal a will amount to
?J
x a at the end of that time. At the end
of the following year the same principal will amount to^2 x =
(55)-
x a. This principal
of two years will, the year after, amount to (5^)'' x a, which will therefore be the principal
of three years ;
increasing in this manner, at the end of four years the principal becomes
(jt)+ X a. After a century it will amount to (|J)'oo x a, and in general
(|j\)"
x a is the
amount of the principal after n years
;
a formula serving to determine the amount of prin-
cipal after any number of years.
The interest of 5 per cent., which has been taken in the above calculation, de-
termined the fraction
|i.
Had the interest been reckoned at 6 per cent, the principal a
would at the end of a year be
(|g)
x a ; at the end of two years to
(jqI)'-
x a
;
and at the end
of u years to
(||ji;)
"
x a. Again, if the interest be at 4 per cent, the principal a will, after n
years, be (|S]i)
"
X a. Now all these formula; are easily resolved by logarithms; for if,
according to the first supposition, the question be
(|',)
"
x a, this will be
L.(5i)"
+ L.a, and
IS
(sg)
"
is a power, we have L.(|^)
"
= nL.
^^
: so that the logarithm of the principal re-
quired is =n X L.|^+ L.a, and the logarithm of the fraction
?i=L.21
L.20.
We shall now consider what the principal of 1000/. will amount to at compound
interest of 5 per cent, at the end of 100 years. Mere w = 100. Hence tlie logarithm of
the principal required will be
= 100L.|^+ L. 1000, calculated as under :

L.21 =1 ;522219.'}
Subtracting L. 20 =
1
-3010300
L.?J
= 0-0211893
Multiply by 100
100 L.?g = 2-1
189300
Add L. 1000 =
3
-0000000
5-1
189300
= Logarithm of the principal
required, from the characteristic whereof the principal must be a number of six figures,
and by the tables it will appear to be 131,501/. In the case of a principal of 3452/. at
6 per cent, for sixty-four years, we have a =3452 and n = QA. Principal at the end of tiie
first year therefore
=|JJ
=
|3. Hence the logarithm of the principal sougiit =
64 x L.|^ +
L.3452, which will be found to amount to 143,763/.
When the number of years is very great, errors of considerable magnitude may
arise from the logarithms not being sufficiently extended in the decimal places; but as our
object here is only to show the principle on which these calculations are founded, we do
not think it necessary further to pursue that subject.
There is another case which now requires our consideration
;
it is that of not only
adding the interest annually to the principal, but increasing it every year by a new sum
li. The original principal a would then increase in the following manner:

After 1 year,
?ia
+ h
After 2 years,
(|J)-a
+
%}p
+ h
After 3 years, (|i)ia +
(|l)'2/<
+ ?',6
+ h
After 4 years, (|l)^a
+
(f'
)'/;
+
(^i
y^fc + ^6
-<-
^
Afternyears, (|^)"a +
(|J)"-'fcH-(:^J)"-2/^ + \^^h
This principal evidently consists of two parts, whereof the first
=(5^)"^,
and the othor,
taken inversely, forms the series h
+
^}>
+
(It)'^''
+ (';!g)'6 + . . . .
(is)""
'''
This last series is
evidently a geometrical progression, whose exponent =
Hy
Its sum, therefore, will be found
by first multiplying the last term (jj)""'/* by the exponent
|J,
which gives
('r,)"/'.
Sub-
tract the lirst term i, and we have the remainder
(jo)"^~''>
^"*^^ lastly, dividing by the ex-