8.3) Add Equations
- With the structure of the model in place, we now add the equations that define its behaviour. To do this select the “Equations” tool from the sketch menu. This will highlight the “Savings”, “interest”, and “INTEREST RATE” variables in the build window. This highlight indicates that these variables do not yet have equations assigned to them
- Click on the “Savings” variable to bring up an “Edit” window. There are two boxes you will mainly use in this window, the “equation” and “initial value” boxes. You will see that the equation box already has “interest” typed into it. Vensim has inferred from your model diagram that this should be the equation. Type “100” into the “initial value” box and click “OK”. The “Savings” variable will now no longer be highlighted as it has a valid equation
- Next, add an equation for the “interest”. Click on the “interest” variable and in the “Edit” window that comes up, type “Savings*INTEREST RATE” into the equation box. Note that a rate variable does not have an initial value, only stocks do. Click “OK” and only the “INTEREST RATE” variable will be left highlighted.
- Click on the “INTEREST RATE” variable and in the “Edit” window that comes up type “0.05” in the equation box. Click “OK” and all your variables will now have valid equations associated with them