chapter  24
7 Pages

CAPITAL COMPUTATION

Because of the arithmetically calculable productivity of cost-capital its net yield may be expressed as a ratio of the original capital. When the productive scheme is followed, this ratio in the case of each aggregation of capital or of each capital commodity coincides with the general percentage of increment. The net yield of the cost-capital is called interest on capital or simply interest. The economic ratio of net yield to capital, the general percentage of increment as we have called it, is the rate of interest.