XIV

CONTENTS

SECOND SUMMARY

PART I. INTRODUCTION

CHAPTER PAGE

I. Income and Capital,. 3

II. Money Interest and Real Interest.36

III. Some Common Pitfalls.45

PART II. THE THEORY IN WORDS

IV. Time Preference (Human Impatience).61

V. First Approximation to the Theory of Interest (As-suming Each Person’s Income Stream Foreknown andUnchangeable Except by Loans) .99

VI. Second Approximation to the Theory of Interest (As-suming Income Modifiable (1) by Loans and (2) by

Other Means).125

VII. The Investment Opportunity Principles.150

VIII. Discussion of the Second Approximation.178

IX. Third Approximation to the Theory of Interest (As-suming Income Uncertain).206

PART III. THE THEORY IN MATHEMATICS

X. First Approximation in Geometric Terms.231

XI. Second Approximation in Geometric Terms .... 263

XII. First Approximation in Terms of Formulas .... 288

XIII. Second Approximation in Terms of Formulas .... 302

XIV. The Third Approximation Unadapted to Mathematical

Formulation.316

PART IV. FURTHER DISCUSSION

XV. The Place of Interest in Economics.325

XVI. Relation of Discovery and Invention to Interest Rates 341

XVII. Personal and Business Loans.356

XVIII. Some Illustrative Facts.372

XIX. The Relation of Interest to Monety and Prices . . . 399

XX. Objections Considered ,.452

XXI. Summary.493

Appendices.507

Bibliography.543

Index ..551