THE THEORY OF INTEREST

equations contains n separate equations, there are inall n (m — 1) equations in the entire set expressing Im-patience Principle A.

§3. Impatience Principle B (n(m — 1) Equations )

Impatience Principle B requires that the rates of timepreference and of interest shall be equal. This relation-ship is represented by the same equations as given in

Chapter XII, namely:

i' = U =/*'=.=

i" = h" = tt'=' .=

^(m—1) — ^ —l) — _ j (m—l)

Here are n(m — 1) equations expressing ImpatiencePrinciple B.

§4. Market Principle A. (m Equations)

The sets of equations which express Market PrincipleA, the clearing of the market, are also the same as be-fore, namely:

Xi + x 2 ' +'.+ x n ' = 0,

x/' + x 2 " +.+ x n " = 0,

Xi (m) + x 2 Cm) +.+ x n (m) = 0.

Here are m equations expressing Market Principle A.

§5. Market Principle B. (n Equations )

Market Principle B, the equivalence of loans and dis-counted repayments, is also represented algebraically asbefore, namely:

[ 304 ]