§7. Opportunity Principle B. (n(m—1) Equations)

Out of this infinite number of options the individual has opportunity to choose any one rather than any other. That particular one will be chosen for which the present value is greater than for any other, in other words, is the maximum.

If the options differ by continuous gradations this Edition: current; Page: [307] principle that the maximum present market value is chosen is the same24 as the principle that r1, the marginal rate of return over cost, shall be equal to i, the market rate of interest.

This is true for each year-to-year relation, so that we have, for Individual 1, the following continuous equations:

i' = r1' = r2' =... = rn',
i'' = r1'' = r2'' =... = rn''
...
...
i(m-1) = r1(m-1) = r2(m-1) =... = rn(m-1).

Here are n(m - 1) equations expressing Investment Opportunity Principle B.