determination of the interest rate

Can our account of interest determination avoid , ’s simplifying concept of the stock of homogeneous capital ? Yes , in a number of ways ,some too complex to discuss in an introductory work. THUS, we may work with various different physical capital goods and processes , being careful never to add their heterogeneous units together, nothing that the sum of their capitalized market values does depend(in a virtuously, and not viciously , circular way) on the market interest rate,and never forgetting that it is machines and not hunks of dollars which enter into physical production functions . if the realistic problem of uncertainty about the future and the risks thereby implied could be ignored , advanced treatises can show rigorously how an equilibrium interest-rate pattern can be defined in such a heterogeneous model.
This is clearly not the place for such refinements . But it is desirable to mention that a theory of equilibrium interest rate can be given which avoids the homogeneous-capital assumptions .
The key to a simple approach comes from Fisher ’s diagram, in footnote , which states the following fundamental proposition about the theory of interest :
Society can exchange present consumption goods for future consumption goods at a trade off rate depicted by the rate of interest .