Isaac Newton and compound interest

Isaac Newton's lesser-known activities included explorations of the theory of compound interest and calculations of the sum of money which should be paid to purchase or renew a property lease that would run for either a fixed term of years or until the last survivor of three nominated people had died. This paper outlines the wider contemporary context for his work in this area and describes the results he achieved, including his certification of the accuracy and methods of the tables based on compound interest which were produced by George Mabbut for lease purchase or renewal. These tables remained in widespread use for more than 70 years but a controversy about the methods recommended for using them to calculate the cost of leases on lives rose to a height a few years after Newton's death. Possibly he could have suggested a more scientific method of valuing leases on lives, based on the mortality rates reported by John Graunt, but he did not do so. Finally, the paper poses some key questions about Newton's involvement in this area and whether it would be fair to regard it as rather limited. This article is part of the theme issue 'Newton, Principia, Newton Geneva Edition (17th-19th) and modern Newtonian mechanics: heritage, past & present'.