Equation of Motion for Capital Stock Calculator

✖Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation.ⓘ Depreciation [D]			+10% -10%
✖Capital Used Today defines how much capital the firm has utilised today.ⓘ Capital Used Today [K_t]			+10% -10%
✖Investment Today refers to the amount of capital invested by the business today.ⓘ Investment Today [I_t]			+10% -10%

✖Equation of Motion for Capital Stock defines how much capital the firm has created in particular point of time.ⓘ Equation of Motion for Capital Stock [K_t+1]

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Formula

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Equation of Motion for Capital Stock

Formula

`"K"_{"t+1"} = (1-"D")*"K"_{"t"}+"I"_{"t"}`

Example

`"130890"=(1-"11880")*"90"+"1200000"`

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Equation of Motion for Capital Stock Solution

STEP 0: Pre-Calculation Summary

Formula Used

Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today
K_t+1 = (1-D)*K_t+I_t
This formula uses 4 Variables

Variables Used

Equation of Motion for Capital Stock - Equation of Motion for Capital Stock defines how much capital the firm has created in particular point of time.
Depreciation - Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation.
Capital Used Today - Capital Used Today defines how much capital the firm has utilised today.
Investment Today - Investment Today refers to the amount of capital invested by the business today.

STEP 1: Convert Input(s) to Base Unit

Depreciation: 11880 --> No Conversion Required
Capital Used Today: 90 --> No Conversion Required
Investment Today: 1200000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

K_t+1 = (1-D)*K_t+I_t --> (1-11880)*90+1200000

Evaluating ... ...

K_t+1 = 130890

STEP 3: Convert Result to Output's Unit

130890 --> No Conversion Required

FINAL ANSWER

130890 <-- Equation of Motion for Capital Stock

(Calculation completed in 00.004 seconds)

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Equation of Motion for Capital Stock

Go Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today

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Equation of Motion for Capital Stock Formula

Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today
K_t+1 = (1-D)*K_t+I_t

What do you mean by Equation of Motion for Capital Stock ?

Equation of Motion for Capital Stock refers to the amount of investment today has to be more than the depreciation of the capital stock in order for the capital stock to increase. Consider a typical macro firm set-up where the capital can be produced from output goods using a linear technology. It costs some X units of output good to make a unit of the capital, and the capital production is instantaneous. For simplicity, let the numeraire be the output good. The firm's technology meets the typical strictly concave, increasing TFP conditions: the amount of capital invested by a firm at time produces an output at a particular point of time.

How to Calculate Equation of Motion for Capital Stock?

Equation of Motion for Capital Stock calculator uses Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today to calculate the Equation of Motion for Capital Stock, Equation of Motion for Capital Stock refers to the amount of capital the firm has created during time. Equation of Motion for Capital Stock is denoted by K_t+1 symbol.

How to calculate Equation of Motion for Capital Stock using this online calculator? To use this online calculator for Equation of Motion for Capital Stock, enter Depreciation (D), Capital Used Today (K_t) & Investment Today (I_t) and hit the calculate button. Here is how the Equation of Motion for Capital Stock calculation can be explained with given input values -> 130890 = (1-11880)*90+1200000.

FAQ

What is Equation of Motion for Capital Stock?

Equation of Motion for Capital Stock refers to the amount of capital the firm has created during time and is represented as K_t+1 = (1-D)*K_t+I_t or Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today. Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation, Capital Used Today defines how much capital the firm has utilised today & Investment Today refers to the amount of capital invested by the business today.

How to calculate Equation of Motion for Capital Stock?

Equation of Motion for Capital Stock refers to the amount of capital the firm has created during time is calculated using Equation of Motion for Capital Stock = (1-Depreciation)*Capital Used Today+Investment Today. To calculate Equation of Motion for Capital Stock, you need Depreciation (D), Capital Used Today (K_t) & Investment Today (I_t). With our tool, you need to enter the respective value for Depreciation, Capital Used Today & Investment Today and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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