The following tables come from the Professional Farm Management Guidebook No.2. Discounting and Other Interest Rate Procedures in Farm Management by A. H. Chisholm and J. L. Dillon, published in 1971 by the Department of Agricultural Economics and Business Management of the University of New England, Armidale. We are greatly indebted to these authors for their kind permission to use them. The derivation and use of these tables is fully explained in Guidebook No.2, which is one of an excellent series of farm management booklets from the Department of Agricultural Economics and the Agricultural Business Research Institute, University of New England, Armida1e, NSW, Australia. To' help you understand what may appear to be a bewildering array of numbers, the following explanations are given here.

In all of the tables, the number of years is shown in the first column at the left hand side of the page, headed ‘Years', and 'n', which means ‘number of years'. The interest rate being considered is shown in the row at the top, e.g. 0.0 I (J %),0.10 (10%). In the body of each table is a factor appropriate to the number of years and the chosen interest rate. For example, in Table A, the present value of one dollar in 20 years’ time, at an interest rate of 5%, is $0.3769 (roughly 38 cents).

All of the tables are based on the assumption that $1 (or I unit of any currency) is the item being considered, e.g. in Table A, the future lump sum is $1. In Table B, the factors in the bodyofthetabletellyouhowmuch$1 will grow to ifinvested at compound interest for a given number of years at a particular interest rate. Thus, with an interest rate of 5%, $1 invested now, with the interest it earns re-invested each year, will grow to $2.65 in 20 years time (see Column.05 (5%), row 20 years). Where the amounts considered are more than $1 it is a simple case of mUltiplying the factors in the table by the sum involved. For example, $10000 will grow to $26500 (10000 x 2.65) if invested for 20 years at 5%.

We will now examine each table in detail. In Table A, the current value is shown of $1 received at some time in the future, at specified interest rates.