Let's keep track of a nation's capital stock for five years. Mordor starts off with 1,000 machines, and every year, 5% of the machines depreciate or wear out.
Fortunately, the people in this land produce 75 machines per year, every year. The key equation for keeping track of capital is quite simple:
Next Year's Capital = This year's capital + Investment -Depreciation
Fill in the table.
