Short Methods Frequently interest at 6% can be computed much more easily by what is known as the Bankers' Sixty-Day Method, the rule for which is given below. Rule. PARIS STOCK EXCHANGE 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 $16.80 Interest for 4 months 3.36 Interest for 24 days $20.16 Interest for 4 months, 24 days $.840 Interest for 6 days 4 $3.36 Interest for 24 days EXAMPLE 2. Find the interest on $420 for 8 months, 15 days, In each of the following examples find the interest at 6% for the time indicated: 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 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. 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 of itself. To find interest at 71% increase the interest at 6% by of itself. Exercise In the first five of the following examples find the interest at 4%, in the last five, at 71% 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. FROM DAY OF BANKERS' TIME TABLE TO THE SAME DAY OF THE NEXT Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Apr. 275 306 334 365 30 61 91 122 153 183 214 244 335 365 304 334 274 304 May 245 276 304 31 61 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? |