Given Information: Net investment flow rate is $ t×106 per year and the duration is from the fourth to the eighth year.

Concept Used: According to the Net Change Theorem, the integral of the rate of change is the net change, that is

  ∫abF'(x)dx=F(b)−F(a)

Calculation: In the Net Change Theorem, replace F′(x) with the ‘net investment flow’ rate f'(x) and the net change with ‘capital formation’, that is f(8)−f(4) , to write

  Capital Formation4→8=∫48tdt

  =23t32]48=23(512−64)

  =9.75

Therefore, the capital formation from the fourth to the eighth year is $9.75 million