A look at the mathematician and his tables.
In over 35 years of public speaking, I have made audiences grimace, laugh and, I hope, develop their understanding of the world of property. Yet, this summer, I mentioned an antiquarian book that I had just acquired and the audience reaction can only be said to be excitable. What tome could garner such a reaction? Believe it or not, it was a simple set of valuation tables albeit, admittedly, a very old set of tables by a historically renowned author, Sir Isaac Newton.
Property valuation tables
Before I talk specifically about the book that Sir Isaac Newton wrote, perhaps I should explain what valuation tables do. In short, the tables will tell you at any given rate of interest either the future value or present value of any known sum of money. This is nothing to do with inflation (indeed, in Newton’s day there was no perception of inflation – it existed, but it wasn’t readily observable), but it is all to do with interest rates.
If banks gave interest at 2%, then we can all calculate that the account with £100 today will have £102 in
one year’s time. What valuation tables do (using the compound interest) is calculate the accumulation over much longer periods. For example, how much will £100 accumulate to in 25 years? Go to the tables and look for the number at the intersection of 2% and 25 years, and it gives you a multiplier of 1.6406. Multiply this times £100 and it gives an answer of £164.06 as the amount in the bank account at 2% interest in 25 years’ time. So, that is a future value calculation.
If, however, you are due to be paid a sum in the future (say a rent in 25 years’ time), you can see that (using the reverse of the example above) at 2%, every £164.06 receivable has a present value of £100 today. More importantly, if you go to 25 years at 2% in the tables, it gives a present value multiplier of 0.609531 which, when multiplied by the future value of £164.06, gives £100. This is a present value calculation. The tables have a whole host of similar calculations related to simple interest, life interests, annual payments and life annuities that allowed anyone to undertake the relevant calculations that we would do today by calculator or spreadsheet by the simple multiplication of two numbers. Newton’s tables are a very early (if not the earliest) example of such tables.
