10. What note at 6% interest must be given March 1 to cancel the following bill at maturity? 272. Partial payment is part payment on a note, draft, or other form of obligation. When a payment is made, an indorsement is entered on the back of the paper, somewhat after the following form: Rec'd on the within note Jan. 1, 1914, $50 March 2, 1914, $75 NOTE. The ordinary practice, especially with banks, is to take separate notes for whatever payments are agreed upon at the time the loan is made. Thus, if a borrower wishes to borrow $150 for 3 mo., and repay $50 a month, the bank would probably take 3 notes for $ 50 each, one due in 30 da., one in 60 da., and one in 90 da. 273. The two methods in general use in computing partial payments are the United States Rule and the Merchants' Rule. 274. The United States Rule is authorized by the United States Supreme Court, and is used when the partial payments are made on interest-bearing notes having 1 yr. or more to run. (a) Interest must not be paid on interest. (b) Accrued interest must be paid before the payment can reduce the amount of the debt. 1. What was the balance due on a note for $2000 dated June 10, 1911, to run 1 yr. with interest at 6%, the following payments having been made: Aug. 3, 1911, $500; Dec. 15, 1911, $25; Feb. 3, 1912, $500? (Compound time is always used.) Face of note. SOLUTION Int. from June 10, 1911, to Aug. 3, 1911 Amount due Aug. 3, 1911. 2000. 17.67 2017.67 of the payment, int. and payment must be carried Find the balance due on each of the following notes: 275. The Merchants' Rule, while not a strict rule of law, is generally used when the interest-bearing note runs 1 yr. or less. (a) The note bears interest until date of settlement. (b) Each payment bears interest from its date until date of settlement. NOTE. Some business men use exact time, while others use compound subtraction. What 1. Face of note, $1000; time, 9 mo. from Jan. 1; rate, 6%. Indorsements: Feb. 1, $100; June 1, $200. amount was due at maturity? (Compound time.) Find the balance due on each of the following, using compound subtraction to find the time in the 2d and 3d, and exact time in the 4th and 5th. MISCELLANEOUS PROBLEMS GROUP 1 1. From the equation PRT= I, find R. 2. By applying the formula, find I in the following: 3. By the cancellation method find the interest on the following: $98.60 for 72 da. at 6% $321.05 for 90 da. at 5% $426.17 for 35 da. at 7% 4. By the following: $1260.09 for 63 da. at 6% 60-da. method find the interest on the $621.50 for 4 mo. at 6% $283.17 for 5 mo. at 5% $12620.70 for 1 yr. at 41% $161.13 for 112 da. at 31% 5. By the 6% method find the interest on the following: $378.50 from Feb. 2, 1913, to April 10, 1913, at 6% $216.06 from 11/3/12 to 2/1/13 at 8% $7615.83 from Oct. 23, 1912, to Jan. 13, 1913, at 5% $70 from 1/3/13 to 4/19/13 at 7% $169.69 from 1/15/13 to 2/28/13 at 4% 6. By the interest table, p. 149, find the interest on the following: $1000 for 8 mo. 3 da. at 41% $300 for 3 mo. at 6% $279 for 1 mo. 15 da. at 5% $1628 for 1 yr. 2 mo. 11 da. at 51% $65 for 36 da. at 7% 7. Find the exact interest (p. 151) on: $1427 for 48 da. at 6% $216.60 for 37 da. at 61% $98.54 for 3 mo. 12 da. at 5% $627.43 for 1 mo. 15 da. at 41% $13261.82 for 1 yr. 2 mo. 27 da. at 7% 8. Find, by the most convenient method for each, the interest on the following: $3726.81 from April 5, 1911, to June 3, 1913, at 6% $2200 from July 3, 1910, to Aug. 6, 1914, at 8% $125 for 9 mo. 22 da. at 4% 9. A man lent £ 2159 5s. 6d. at 6%. Find the interest yearly. 10. How much money must I invest at 5% in order to receive a semiannual income of $1268.50? GROUP 2 1. A man builds a house costing $3200. He pays $1400 cash and gives three equal notes for the balance due, payable in 1, 2, and 3 yr. respectively, with interest at 5%. If he pays all interest due at the end of each year, what amount does he pay at the end of each year in paying off the indebtedness? |