EXERCISE 123 Find the bank discount and the proceeds of the following indicated notes, allowing 3 days of grace in examples 1, 2, 10, 11, 12, 13, and no grace in the remaining: Find the bank discount and the proceeds of a 90-day note for $250, dated Portland, Me., June 9, 1907, bearing interest at 6%, and discounted July 8, 1907, at 8%. Step 1. Find the maturity value of the note. Maine allows 3 days of grace. Hence, the interest will be computed for 93 days. $250 3.87 interest at 6% for 93 days. = $253.87 maturity value of the note. = Step 2. Find the term of discount (exact number of days from July 8, to Sept. 10, the date of maturity). Step 3. Find the bank discount. the maturity value of the note. This is reckoned on = Int. on $253.87 for 64 days at 8% $3.61. = EXERCISE 124 Find the discount and the proceeds of the following indicated notes, allowing 3 days of grace in examples 2, 3, 6, 9, 10, 13, and no grace in the remaining: — COMMERCIAL DISCOUNTS Commercial, or Trade Discount is a reduction from the list price of goods, or the amount of a bill. If two or more discounts are allowed, the first is reckoned on the list price, the next on the remainder after deducting the first discount, the third is reckoned on the second remainder, etc. Example. Find the cost price of a bill of goods, if the list price is $690 and discounts of 25%, 10%, and 5% are allowed. 1. Find the cost if the list price is $350, and the discount 20%. 2. Find the cost when the list price is $823, and the discount 121%. 3. What is the cash value of a bill of goods listed at $937.50 when a discount of 163% is given? 4. A suit of clothes is marked $17.50, and is sold for $12.00. What is the rate of discount? 5. A bookseller buys 60 books marked $ 2.10 each at a discount of 163%, and sells them at the marked price. What is his gain per cent, and how much profit does he make on the sale of the books? 6. A dealer buys goods at a discount of 163% and sells them at 5% above the list price. What is his gain per cent? 7. Find the cost price in each case, if the list prices and rates of discount are as follows: When payments are made on a note, these payments are known as partial payments. These payments and their dates of payment are written on the back of the note. There are several methods of computing the amounts due on such notes. The best known and most widely used are the United States Rule and the Merchants' Rule. UNITED STATES RULE Find the amount of the principal until the time of the first payment, or until the sum of two or more payments equals or exceeds the interest. Subtract the payment, or the sum of the two or more payments from the amount. Proceed with the remainder as a new principal. Continue in this manner until the date of settlement. A note for $600.00 dated Aug. 10, 1902, was indorsed as follows: $512.50 = second principal. $512.50 ×.06 × 4.87 int. for 1 mo. 27 da. $517.37 amt. for 1 mo. 27 da. = = $367.37 = third principal. $367.37 × .06 × 2.02 int. for 1 mo. 3 da. = 1.9 = = $4.87. 12 1.1 12 NOTE. Problems of this type are not as common in business as they were some years ago. Payments are now usually made at equal intervals of time. |