developed will continue to serve us The big difference is that the benefits and costs of holding capital are distributed over time We will also examine markets for natural resources in this chapter Like decisions involving capital, choices in the allocation of natural resources have lasting effects For potentially exhaustible natural resources such as oil, the effects of those choices last forever For the analysis of capital and natural resources, we shift from the examination of outcomes in the current period to the analysis of outcomes distributed over many periods Interest rates, which link the values of payments that occur at different times, will be central to our analysis [1] Peter B De Selding, “Teledesic Plays Its Last Card, Leaves the Game,” Space News Business Reportonline, July 7, 2005 13.1 Time and Interest Rates LEARNING OBJECTIVES Define interest and the interest rate Describe and show algebraically how to compute present value List and explain the factors that affect what the present value of some future payment will be Time, the saying goes, is nature’s way of keeping everything from happening all at once And the fact that everything does not happen at once introduces an important complication in economic analysis Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 678