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Short Methods

Frequently interest at 6 % can be computed much more easily by what is known as the BankersSixty-Day Method, the rule for which is given below.

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Rule. — To find the interest for 60 days move the decimal point in the principal two places to the left; for 6 days move the decimal point in the principal three places to the left. From these results find the interest for the required time.

EXAMPLE 1. Find the interest on $ 840 for 4 months, 24 days, at 6 % $ 8.40 Interest for 60 days (or 2 months) 2

$.840 Interest for 6 days $ 16.80 Interest for 4 months

4 3.36 Interest for 24 days

$ 3.36 Interest for 24 days $ 20.16 Interest for 4 months, 24 days

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EXAMPLE 2. Find the interest on $ 420 for 8 months, 15 days, at 6 % $ 4.20 Interest for 60 days (or 2 months) 4

$.420 Interest for 6 days $16.80 Interest for 8 months

23 1.05 Interest for 15 days

$ 1.050 Interest for 15 days $ 17.85 Interest for 8 months, 15 days

Exercise

In each of the following examples find the interest at 6% for the time indicated :

1. $ 620 for 60 days 2. $ 175 for 30 days 3. $ 300 for 90 days 4. $ 200 for 90 days 5. $ 600 for 80 days 6. $ 750 for 90 days 7. $ 650 for 30 days 8. $ 700 for 60 days 9. $ 820 for 90 days

10. $ 500 for 2 months, 15 days
11. $ 1000 for 3 months, 12 days
12. $ 850 for 4 months, 12 days
13. $ 650 for 5 months, 18 days
14. $ 880 for 6 months, 24 days
15. $720 for 3 months, 12 days
16. $ 850 for 6 months, 16 days
17. $ 900 for 8 months, 20 days
18. $ 975 for 9 months, 24 days

When interest is computed at 4%, 5%, 7 %, or 8% we may use the following rules.

Rules. To find interest at 4% decrease the interest at 6% by of itself.

To find interest at 5% decrease the interest at 6% by á of itself.

To find interest at 7 % increase the interest at 6% by of itself.

To find interest at 8% increase the interest at 6 % by } of itself.

RATE

4 % 4 %

Exercise
Compute the interest for each of the following:
PRINCIPAL

TIME
1. $ 80.00 6 mo. 15 da.
2. $ 850.00 11 mo. 15 da.
3. $ 2000.00 10 mo. 10 da.

5%
4. $ 96.50 4 yr. 6 mo.

5 %
5. $ 625.75
2 yr. 4 mo. 15 da.

5%
6. $ 500.00 2 yr. 8 mo. 10 da. 7 %
7. $ 440.00 1 yr. 2 mo. 10 da.

7 %
8. $ 4250.00 1

yr.
5 mo. 15 da.

8%
9. $ 1500.00 3 yr. 6 mo. 15 da. 8%

10. $ 75.00 1 yr. 9 mo. 20 da. 8 % When interest is computed at 41 %,71 %, or other fractional rate we may use the following rules.

Rules. To find interest at 41 % decrease the interest at 6% by 1 of itself. To find interest at 7} % increase the interest at 6 % by 1 of itself.

Exercise In the first five of the following examples find the interest at 41%, in the last five, at 7 % :

1. $ 650 for 60 days 6. $ 550 for 2 months, 15 days 2. $ 175 for 30 days 7. $ 1550 for 3 months, 12 days 3. $ 475 for 90 days 8. $ 850 for 4 months, 12 days 4. $ 250 for 90 days 9. $1250 for 5 months, 18 days 5. $ 825 for 90 days 10. $ 725 for 6 months, 15 days

Persons who have much computing of interest to do use interest tables of various kinds. In determining the amount of time from one date to another, for example, the following table is used.

BANKERS' TIME TABLE

TO THE SAME DAY OF THE NEXT

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Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Jan. 365 31 59 90 120 151 181 212 243 273 304 334 Feb. | 334 365 28 59 89 | 120 | 150 181 212 242 273 303 Mar. | 306 337 | 365 31 61 92 122 153 184 214 | 245 | 275 Apr. 275 306 334 365 30 61 91 122 153 183 214 244 May 245 276 304 335 365 31 61 92 123 153 184 214 June 214 245 273 304 334 365 30 61 92' 122 153 183 July 184 215 243 274 304 335 365 31 62 92 123 153 Aug. 153 184 212 243 273 304 334 365 31 61 92 122 Sept. 122 153 181 212 242 273 303 334 365 30 61 91 Oct. 92 123 | 151 | 182 212 243 273 304 335 365 31 61 Nov. 61 92 120 | 151 181 212 242 273 304 334 | 365 30 Dec.

31 62 90 121 151 | 182 212 243 274 304 335 365

Compound Interest

Compound Interest is interest computed for stated intervals on the sum of the principal and unpaid interest. Customarily interest is compounded either annually or semiannually.

EXAMPLE. To what will $ 400 amount in 2 years, 6 months, at 4%, compounded annually ? Principal

$ 400.00 Interest for 1st yr. at 4 %

16.00 $ 416 Principal for 2d yr.

$ 416.00

.04 Interest for 2d yr. at 4 %

16.64 $ 16.64 Principal for 3d yr.

$ 432.64 Interest for 6 mo, at 4 %

8.65 Amount for 2 yr.,

$ 441.29

6 mo.

Exercise Find the amount at compound interest for each of the following:

1. $ 100 for 2 yr. at 4 % 5. $ 2500 for 2 yr. at 5 % 2. $ 200 for 3 yr. 6 mo. at 6 % 6. $ 3500 for 3 yr. at 6 % 3. $ 300 for 2 yr. 6 mo. at 5 % 7. $ 4200 for 21 yr. at 4% 4. $ 400 for 2 yr. 6 mo. at 7 % 8. $ 75 for 31 yr. at 7 %

Compound interest is ordinarily figured from a table such as the one given below.

COMPOUND INTEREST TABLE

Amount of $1, at Various Rates, Interest Compounded Annually.

YEARS

4 %

• 5%

6%

7 %

1 2 3 4 5 6 7 8 9 10 11 12 13

1.040000 1.081600 1.124864 1.169859 1.216653 1.265319 1.315932 1.368569 1.423312 1.480244 1.539454 1.601032 1.665074 1.731676 1.800944 1.872981 1.947901 2.025817 2.106849 2.191123

1.050000 1.102500 1.157625 1.215506 1.276282 1.340096 1.407100 1.477455 1.551328 1.628895 1.710339 1.795856 1.885649 1.979932 2.078928 2.182875 2.292018 2.406619 2.526950 2.653298

1.060000 1.123600 1.191016 1.262477 1.338226 1.418519 1.503630 1.593848 1.689479 1.790848 1.898299 2.012197 2.132928 2.260904 2.396558 2.540352 2.692773 2.854339 3.025600 3.207136

1.070000 1.444900 1.225043 1.310796 1.402552 1.500730 1.605782 1.718186 1.838459 1.967151 2.104852 2.252192 2.409845 2.578534 2.759032 2.952164 3.158815 3.379932 3.616528 3.869684

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