COMMISSION. 121. COMMISSION is an allowance made to a factor or commission merchant for buying and selling. It is estimated at so much per cent. on the money used in the transaction. What is Commission? How is it estimated? Since commission is a certain percentage of money employed in buying and selling goods, it may be found by the rule under Percentage, ART. 112, which may be given as follows: RULE. Multiply the sum of money on which commission is to be computed, by the rate per cent. expressed in a decimal, and the product, when pointed off according to the rule for decimals, will be the commission. EXAMPLES. 1. What is the commission on $3765.50, at 3 per cent.? OPERATION. $3765.50 0.035 1882750 1129650 $131.79250 2. What is the commission on $10000, at 4 per cent.? Ans. $400. 3. A factor sells 43 bales of cotton at $375 per bale, and charges 2 per cent. commission. must he pay to his principal? How much money Ans. 15802.50. 4. A sends to B, a broker, $3605 to be invested in stock B is to receive 3 per cent. on the amount paid for the stock. What was the value of the stock purchased? Since B is to receive 3 per cent., it is plain that $103 of A's money would purchase $100 worth of stock. Hence, the amount expended for stock must be 18% of $3605= $3605103=$3500. Ans. NOTE. In such cases as the above, when the given sum includes the factor's commission, and we desire to know what amount he must invest for his principal, so that the balance may be his commission on the amount invested, we must divide the given sum by the percentage of the commission increased by a unit. Thus, dividing $3605 by 103, the quotient is $3500, which is the sum invested. 5. A factor receives $60112, and is directed to purchase cotton at $289 per bale he is to receive 4 per cent. on the money paid for the cotton. How many bales did he purchase? $60112 1.04 $57800 amount paid for cotton. $57800 $289=200, number of bales. 6. The par value* of 125 shares of bank stock was $100 per share. What is the present value, if the stock is worth 18 per cent. above par? Ans. $14750. 7. What is the value of 50 shares of bank stock, the par value of which was $200 per share, on the supposition that it is 12 per cent. below par, or, that it is worth only 88 per cent of its par value? Ans. $8800. * By par value is meant the original cost or estimated value of stock. When it is worth more than its original cost, it is said to be above par, when it is worth less than the original cost, it is said to be below par. 8. A bank fails, and has in circulation $108567. It can pay only 13 per cent. What amount of money has it on hand? Ans. $14113.71. INSURANCE. 122. INSURANCE is a contract, by which an individual or company agrees to restore the value of ships, houses, or goods of whatever kind, which may be destroyed by the perils of the sea, or by fire. The security is given in consideration of a certain sum of money called the premium, which is paid by the owner of the property insured. The premium is always estimated at a certain rate per cent. on the value of the property insured. The written agreement of indemnity is called a policy. What is Insurance? What is premium? How is the premium estimated ? What is the policy? It is obvious that the foregoing rules under Percentage and under Commission, may be employed for finding the insurance premium. EXAMPLES. 1. If A gets his house insured for $1800, at 41 cents on $100, what will be the amount of the premium? 2. An insurance of $12000 was Ocean, at a premium of 2 per cent. mium amount to? Ans. $7.38. effected on the ship What did the pre Ans. $240. 3. I effected an insurance of $5230 on my dwelling house and furniture for 1 year, at 3 of 1 per cent. did the premium amount to? What Ans. $19 6125. Ans. $207.402. 4. What is the amount of premium for insuring $34567, at 60 cents on $100 ? 5. What would be the premium for insuring a ship and cargo, valued at $46370, from Boston to Liverpool, at 21 per cent. ? Ans. $1043.325. LOSS AND GAIN. 123. LOSS AND GAIN is a rule by which merchants discover the amount lost or gained in buying and selling goods. It also assists them in adjusting the price of their goods so as to lose or gain a certain per cent. What is Loss and Gain ? EXAMPLES. 1. Bought 300 yards of broadcloth at $2.25 per yard, and sold the same at $3.50 per yard. How much was gained? $3.50 price of 1 yard. $2.25 cost of 1 yard. $1.25 gain on 1 yard. $1.25 300 $375.00 whole gain. 2. A merchant bought 320 barrels of flour at $5 per barrel, but he finds he must lose 10 per cent. in the sales. How much will he receive for the whole ? The whole cost of 320 barrels is $5 × 320-$1600. Since he loses 10 per cent., one dollar's worth must sell for 90 cents. $1600 Ans. $1440.00 what he receives. 3. Suppose I buy 25 cords of maple wood at $2.50 per cord, and sell it so as to make 25 per cent. I receive for the whole ? What must The whole cost of the wood is $2.50 × 25=$62.50. Since I make 25 per cent., one dollar's worth must sell for $1.25. $62.50 31250 12500 6250 Ans. $78.1250 what I receive. 4. Bought a house and lot for $1400, and sold it for $1200. How much per cent. did I lose? Hence, $1400 cost of house. $1200 what sold for. $200 what I lost on $1400. %==0·144 144 per cent. 5. Bought 225 gallons of molasses for 26 cents per gallon, and sold the whole for $64-35. What did I gain per cent.? The whole cost of 225 gallons is $0.26×225-$58.50. The whole gain is $64.35 - $58.50-$5.85. Since $5.85 is the gain on $58.50, it follows that the gain on $1 will be found by dividing $5.85 by 58.5. Performing the |