Explain the economic concepts of capital and interest in terms of a bank savings account and then apply the same concepts to natural resources.

Capital refers to the assets, such as money or property, which are used to generate wealth. Interest, on the other hand, is the additional money received over time, usually as a percentage of the initial capital invested or lent.

When you deposit money in a bank savings account, the bank utilizes that money to provide loans to other customers, businesses, and even invest in other assets. In exchange for using your deposited funds, the bank pays you interest, either at a fixed rate or a variable rate based on market conditions. The interest earned is added to your initial deposit, which is known as the principal amount. Over time, as interest is earned on the principal amount, the savings account's total balance grows.

In the context of natural resources, capital can be referred to the available resources in an environment, such as forests, minerals, or bodies of water. These resources have the potential to generate wealth when they are extracted, processed, or used in various ways. Just like the money deposited in a bank savings account, properly managed natural resources can generate interest over time. For example, consider the case of a forest. If the trees are harvested and new trees are planted responsibly, this sustainable management can create a continuous income similar to the interest earned in a savings account. The forest's capital, its trees, generates this income when they are responsibly extracted and managed in a sustainable manner. In this scenario, the interest could be the profit generated from the sale of the logged trees, while the forest continues to grow and regenerate, providing a continuous source of income. Similarly, a body of water like a river or a lake can be considered capital if it provides a wealth-generating resource, such as fish or water for irrigation purposes. If the resource is managed in a sustainable manner, it can generate interest – the profit from selling fish or crops that are dependent on the water source. The critical point is to manage the resource so that it does not deplete over time, leading to diminishing returns or even the collapse of the resource base.