Quote from: myrkul on April 23, 2013, 03:39:54 PM

Great, then could you please explain how (and why!) one would charge interest on a plot of trees?

As I said

But don't think I've confused inflation with interest because I'm counting the interest rate as a discount rate for NPV calculus, if I can put money in a bank and get X% return then any future sum of money needs to be compared to how much money I would need to put in a bank today to get that much. In the simplest example a dollar one year from now is worth 95 cents today because if I had 95 cents today I could put it in a bank earn interest and have a whole dollar in one year. Being able to earn interest makes them equivalent and thus discounts the future.

In the tree example it's not the tree that's collecting interest, its the 7 dollars today that I could simply put in a bank at 5% and which would become $1000 dollars in 100 years without having to DO any tree planting at all. This is really very basic NPV math, if you still don't understand then go educate yourself on this concept because it has a huge bearing on what activities the monetary system is encouraging and discouraging.