2. If I invest $867 in 6% bonds at 102%, what income will I receive on my investment?

Ans. $51. 3. What will be my yearly income, if I invest $8428 in Ans. $430. 4. How much stock at a premium of 43% can be bought for $10500, brokerage 1%?

5 per cents, at 98%?

Ans. $10000.

5. If A invest $4795 in Maryland 5's at 87%, brokerage 1%, what will be his yearly income? Ans. $274.

6. Having $10476 to invest, I find I can purchase N. Y. 6's at 1071%, and Eric R. R. 5's at 964%, brokerage %, in each instance. How much more will I receive yearly by investing in the former than in the latter? Ans. $42.

7. A having a farm of 109 acres, which rents for $681.25, sells the same for $125 per acre, and invests the proceeds in Pacific R. R. 6's at 1083%, brokerage 1% for purchasing; will his yearly income be increased or diminished, and how much? Ans. Increased $68.75.

CASE II.

266. To find what sum must be invested to obtain a given income.

1. What sum must be invested in Virginia 5% bonds, purchasable at 80%, to obtain an income of $600 ?

OPERATION.

$600.05 $12000, stock required. $12000 × .80 = $9600, cost or investment.

ANALYSIS.Since $1 of the

stock will ob

tain $.05 in

come, to obtain $600 will require $600÷.05 $12000 (Case I). Multi plying the par value of the stock by the market price of $1, we have $12000.80 $9600, the cost of the required stock, or the sum to be invested.

RULE. I. Divide the given income by the per cent. which the stock pays; the quotient will be the par value of the stock required.

What is Case II? Explanation? Rule?

II. Multiply the par value of the stock by the market value of one dollar of the stock; the product will be the required investment.

EXAMPLES FOR PRACTICE.

2. If N. Y. 6's are 5% below par, what sum must be invested in this stock to obtain an income of $840?

Ans. $13300.

3. What sum must be invested in 5 per cents at 981%, brokerage 1% for buying, to secure an annual income of $1860? Ans. $36642.

4. When N. Y. 5 per cents are quoted at 1081, what sum must I invest to secure an annual income of $1080, brokerage 1%? Ans. $23436.

5. If I sell $25000 in railroad bonds at $933%, and invest a sufficient amount of the proceeds in Pacific R. R. 6's, at 1091%, to yield an annual income of $960, and buy a house with the remainder, how much will the house cost me ? Ans. $5957.50.

CASE III.

267. To find what per cent. the income is of the investment, when stock is purchased at a given price.

1. What per cent. of my investment shall I secure by purchasing the New York 7's at 105%?

OPERATION.

.07 1.05 6%.

ANALYSIS. Since $1 of the stock will cost $1.05, and pay $.07, the income is = 63% of the invest ment.

RULE. Divide the annual rate of income which the stock bears by the price of the stock; the quotient will be the rate upon the investment.

EXAMPLES FOR PRACTICE.

2. What is the rate of income upon money invested in 6% bonds, purchased at 87 per cent. ?

Ans. 638%.

What is Case III? Explanation? Rule?

3. What per cent. on his money will a man receive an nually if he invest in N. Y. 6s at 105%? Ans. 5%. 4. What is the rate of income upon money invested in Missouri 6's at 75%? Ans. 8%.

5. Purchased Pacific R. R. 6's at 1073%, brokerage, 1%; what is the income on the investment? Ans. 55%.

6. Which is the better investment, Mass. 5's at 981%, or Pacific R. R. G's at 1084%, brokerage 1% in each ?

CASE IV.

268. To find the price at which stock must be purchased to obtain a given rate upon the investment.

1. At what price must 6% stocks be purchased in order to obtain 8% income on the investment?

OPERATION.

$.06.08 = $.75

ANALYSIS.

Since $.06, the income of $1 of the stock, is 8% of the sum paid for it, we have (235) $.06 ÷ 75%, the purchase price.

.08

RULE. Divide the annual rate of income which the stock bears by the rate required on the investment; the quotient will be the price of the stock.

EXAMPLES FOR PRACTICE.

2. What must I pay for Missouri 6's that my investment may yield 9% annually?

Ans. 66%

3. What rate of premium does 6% stock bear in the market when an investment pays 5%?

4. At what rate must I buy 5% bonds that I

6% on my investment?

Ans. 20%.

may receive

Ans. 831%.

5. At what rate of discount must 5% bonds be purchased that I may secure 7% annually on the investment?

Ans. 284%.

What is Case IV? Explanation? Rule?

269. Currency is a term used in commercial language, First, To denote the aggregate of Specie and Bills of Exchange, Bank Bills, Treasury Notes, and other substitutes for money employed in buying, selling, ard carrying on exchange of commodities between various nations.

Second, To denote whatever circulating medium is used in any country as a substitute for the government standard.

In this latter sense, the paper circulating medium, when below pai s called Currency, to distinguish it from gold and silver. If, from any cause, the paper medium depreciates in value, as it has done in the United States, gold becomes an object of investment, the same as stocks. In commercial language, gold is represented as rising and falling; but gold being the standard of value, it cannot vary. The variation is in the medium of circulation substituted for gold; hence, when gold is said to be at a premium the currency, or circulating medium is made the standard, while it is virtually below par.

NOTE.-The following examples may be omitted by those who prefer to do so, since they have not the same practical value which they had before the resumption of specie payments in 1879. A knowledge of the subject of gold investments is necessary to the understanding of some old accounts and a number of decisions of the U. S. Courts.

CASE I.

270. To change gold into currency.

1. How much currency can be bought for $150 in gold when gold is at 170%?

OPERATION.

$1.70 × 150 = $255.

ANALYSIS. Since a dollar of gold is worth $1.70 in currency, there can be as many times $1.70 of currency bought as there are dollars of gold. Therefore, $1.70 × 150 = $255 is the amount of currency which can be purchased for $150 in gold.

RULE. Multiply the value of one dollar of gold in currency by the number of dollars of gold.

2. What is the value in current funds of $250 gold, when gold is 147% ? Ans. $367.50.

3. What is the value in cu rent funds of $320.50, when gold is 1371%? Ans. $440.684.

What is Currency? Case I? Explanation? Rule?

4. When gold was at a premium of 33%, how much would $2500 in gold cost? Ans. $3325. 5. A held $8000 in U. S. 5% bonds; what was his annual income in currency, if gold was 138? Ans. $552. 6. What was the yearly income in currency from $9500 of U. S. 6 per cents when gold was 140 ? Ans. $798.

7. A purchased a house, for which he was to pay $4500 in currency, or $3000 in gold, at his option. Did he gain or lose by accepting the latter offer, gold being 1471%, and how much in currency? Ans. Gain $75.

CASE II.

271. To change currency into gold.

1. How much gold can be purchased for $75 current funds, gold being at 150% ?

OPERATION.

$75 $1.50 = 50.

ANALYSIS. A dollar of gold cost $1.50 in currency, therefore there can be as many dollars of gold purchased for $75 in currency as $1.50 is contained times in $75.

RULE. Divide the amount in currency by the price of gold. 2. What was the value in gold of a dollar in currency, when gold was quoted at 1381% ? Ans. $.72.

3. Gold being the standard, what was the rate of discount upon current funds, when gold was at 280%? Ans. 644%. 4. How much gold could be purchased for $4181 current funds, when gold was quoted at 148% ? Ans. $2825.

5. If I sell prints for 24 cents per yard, in currency, what is the price in gold, gold being at 160%? Ans. 15 cents. 6. Sold $5900 U. S. bonds at 90%, and invested the pro ceeds in gold at 1474; how much gold did I purchase?

Ans. $3600.

7. What was the value in gold of a dollar in currency, when gold was at 145%? Ans. $.688. 8. I invested $792 of currency in gold, when gold was quoted at 165%. How much gold did I purchase? Ans. $480.

What is Case II? Explanation? Rule?