Comments on: Chapter 1 Study Guide — Question #4 http://pdsblogs.org/pdsapes810/2009/08/31/chapter-1-study-guide-question-4/ ...just a drop in the ocean... Sat, 02 Feb 2013 20:35:11 +0000 hourly 1 http://pdsblogs.org/?v=3.4.1 By: Julie Cannon http://pdsblogs.org/pdsapes810/2009/08/31/chapter-1-study-guide-question-4/comment-page-1/#comment-29 Julie Cannon Tue, 01 Sep 2009 01:58:34 +0000 http://pdsblogs.org/pdsapes810/?p=35#comment-29 The example given in the book helped me out when I first read this question, and it is very similar to the fishing activity we did on Friday. Principal is like having all 16 of the fish in the pond and doing what my group did which was consume all of them in the first "year". Sure we made profit but not nearly as much or for as long as we could have if we "invested" our fish. If one group "invested" their fish, they would have gained interest off of them, in this case, one fish per every fish left in the pond. "Investing" the fish was a smarter idea because in the long run, each person got to stay in their "town" for a long period of time, therefore making more profit over time. To me, the idea of gaining interest in the environment is like the stewardship worldview. We will use the resources our planet provides us, but we do have a responsibility to manage what we use. If we use it all at once, that's it. If we use it in small amount over time, the environment has time to renew some of the resources we use. The example given in the book helped me out when I first read this question, and it is very similar to the fishing activity we did on Friday. Principal is like having all 16 of the fish in the pond and doing what my group did which was consume all of them in the first “year”. Sure we made profit but not nearly as much or for as long as we could have if we “invested” our fish. If one group “invested” their fish, they would have gained interest off of them, in this case, one fish per every fish left in the pond. “Investing” the fish was a smarter idea because in the long run, each person got to stay in their “town” for a long period of time, therefore making more profit over time.

To me, the idea of gaining interest in the environment is like the stewardship worldview. We will use the resources our planet provides us, but we do have a responsibility to manage what we use. If we use it all at once, that’s it. If we use it in small amount over time, the environment has time to renew some of the resources we use.

]]> By: richardgee http://pdsblogs.org/pdsapes810/2009/08/31/chapter-1-study-guide-question-4/comment-page-1/#comment-28 richardgee Tue, 01 Sep 2009 01:42:07 +0000 http://pdsblogs.org/pdsapes810/?p=35#comment-28 Say you have a million dollars in the bank earning a solid 10% interest a year. So in one year you earn $100,000. If you were to live of interest then you would be spending $100,000 a year or less so that way the "principal" (the original one mil) is untouched and can earn another $100,000 next year. But if you spend more than $100,000 after that year, for instance $200,000, then you have have to exhaust the $100,000 that you earned on interest and start tapping into the one mil to support your budget. That leaves $900,000 left in the bank and you are living off "principal." Eventually, at a spending rate of $200,000 a year, there would be no money left. The major difference is that living off principal is unsustainable, while living off interest does not deplete what was originally there. It sounds like you probably already knew that though so I guess thats just for anyone who needed clarification. When it comes to the environment, the same rules apply. When it came to the goldfish, there was an interest rate of 100%. Kyle's group lived off of interest so that out of 16 goldfish, he would only take 8. Since there were eight left, the population doubled and grew to 16 again. If anyone group took more than 8 goldfish though, like Adcock did (called out), then they would be living off Principal and eventually the lake ran out of fish. The simplest way to look at it for the environment is that interest = rate of reproduction or rate of recovery. If your consuming faster than the rate, then your living off Principal. Say you have a million dollars in the bank earning a solid 10% interest a year. So in one year you earn $100,000. If you were to live of interest then you would be spending $100,000 a year or less so that way the “principal” (the original one mil) is untouched and can earn another $100,000 next year.

But if you spend more than $100,000 after that year, for instance $200,000, then you have have to exhaust the $100,000 that you earned on interest and start tapping into the one mil to support your budget. That leaves $900,000 left in the bank and you are living off “principal.” Eventually, at a spending rate of $200,000 a year, there would be no money left.

The major difference is that living off principal is unsustainable, while living off interest does not deplete what was originally there.

It sounds like you probably already knew that though so I guess thats just for anyone who needed clarification.

When it comes to the environment, the same rules apply. When it came to the goldfish, there was an interest rate of 100%.
Kyle’s group lived off of interest so that out of 16 goldfish, he would only take 8. Since there were eight left, the population doubled and grew to 16 again.

If anyone group took more than 8 goldfish though, like Adcock did (called out), then they would be living off Principal and eventually the lake ran out of fish.

The simplest way to look at it for the environment is that interest = rate of reproduction or rate of recovery. If your consuming faster than the rate, then your living off Principal.

]]> By: derrickwillard http://pdsblogs.org/pdsapes810/2009/08/31/chapter-1-study-guide-question-4/comment-page-1/#comment-27 derrickwillard Mon, 31 Aug 2009 21:56:34 +0000 http://pdsblogs.org/pdsapes810/?p=35#comment-27 Great question. I think this idea was illustrated by some groups during our fishing simulation...anyone care to elaborate? Great question. I think this idea was illustrated by some groups during our fishing simulation…anyone care to elaborate?

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