PARTIAL PAYMENTS. 183. Partial Payments are payments in part on notes. 184. An Indorsement is a record of a partial payment, with its date, made on the back of a note, 185. The Merchants' Rule. When partial payments are made on an interest-bearing note, and settlement is made in a year or less, business men usually employ what is known as THE MERCHANTS' RULE. Find the amount of the face of the note from its date to the day of settlement; also, the amount of each payment from its date to the day of settlement. Subtract the sum of the amounts of the payments from the amount of the face of the note. WRITTEN EXERCISES. 1. What amount is due Nov. 27, 1894, on a note for $800, dated Jan. 15, 1894, with interest at 6%, on which are the following indorsements: May 3, 1894, $300; July 9, 1894, $400? PROCESS. Amount of $800 for 10 mo. 12 da., 66 66 $841.60 $719.40 Ans., $122.20 $300 for 6 mo. 24 da., $310.20 The amount of $800 from Jan. 15th to Nov. 27th, or 10 mo. 12 da., is $841.60. The amount of $300 from May 3d to Nov. 27th, or 6 mo. 24 da., is $310.20. The amount of $400 from July 9th to Nov. 27th, or 4 mo. 18 da., is $409.20. The sum of the amounts of the payments is $719.40, which subtracted from the amount of the face of the note leaves $122.20. 2. What is due Dec. 20, 1890, on a note for $1200, dated Feb. 8, 1890, with interest at 5%, on which is the following indorsement: June 5, 1890, $800? 3. What is due Dec. 24, 1888, on a note for $1600, dated Mar. 1, 1888, with interest at 6%, on which are the following indorsements: May 10th, $500; July 15th, $400 ? 4. What is due Nov. 27, 1891, on a note for $2000, dated Jan. 1, 1891, with interest at 5%, on which are the following indorsements: Mar. 3, 1891, $600; May 7, 1891, $800? 5. What is due Dec. 12, 1892, on a note for $2500, dated Feb. 6, 1892, with interest at 6%, on which are the following indorsements: Apr. 1, 1892, $800; June 4, 1892, $700; Aug. 10, 1892, $500; Sept. 12, 1892, $300? 6. On a note for $1860, dated Dec. 3, 1894, and bearing interest at 5%, the following payments were made: Dec. 20, 1894, $500; Jan. 24, 1895, $600; May 10, 1895, $300; Aug.. 30, 1895, $250. How much is due Dec. 3, 1895 ? 7. A note for $3200, dated Jan. 8, 1894, has the following indorsements on it: Feb. 20, 1894, $800; Apr. 20, 1894, $600; June 25, 1894, $500; Aug. 16, 1894, $400; Oct. 25, 1894, $300. What is due Jan. 1, 1895, at 5%? 186. United States Rule. When partial payments are made on an interest-bearing note, and settlement is not made within a year, the amount due is found by the following rule, adopted by the Supreme Court of the United States and nearly all the States: THE UNITED STATES RULE. Find the amount of the principal to a time when a payment, or the sum of the payments, equals or exceeds the interest due, and from this amount subtract the payments or the sum of the payments. Regard the remainder as a new principal, and proceed as before to the time of settlement. WRITTEN EXERCISES. 1. What is due Aug. 18, 1893, on a note for $400, dated Apr. 1, 1891, with interest at 6%, on which are the following indorsements: Jan. 13, 1892, $50; Sept. 22, 1892, $10; Apr. 25, 1893, $125. June 4, 1893. Oct. 15, 1893. Feb. 20, 1894. $400.00 $418.80 50.00 $368.80 15.31 13.09 $397.20 135.00 $262.20 $267.14 2. A note for $800, dated Apr. 4, 1892, had the following indorsements: $20 300 350 What was due Aug. 1, 1894, at 6% ? 3. What is due May 10, 1891, on a note for $1600, dated Sept. 16, 1888, with interest at 5%, on which are the following indorsements: June 8, 1889, $400; Oct. 15, 1890, $500; Jan. 15, 1891, $300? 4. What is due Oct. 20, 1893, on a note for $2000, dated Mar. 6, 1890, with interest at 5%, on which are the following indorsements: July 6, 1891, $150; Sept. 25, 1892, $200; May 9, 1893, $250? 5. What is due May 20, 1883, on a note for $2400, dated June 4, 1880, on which are the following indorsements: Aug. 8, 1880, $180; May 2, 1881, $100; July 10, 1882, $50; Jan. 15, 1883, $500? 6. What is due Dec. 31, 1895, on a note for $1800, dated Oct. 10, 1891, with interest at 7%, on which are the following indorsements: Apr. 1, 1892, $55.50; July 21, 1893, $200; June 15, 1895, $200 ? 7. Chicago, Mar. 6, 1888. $3500. On demand, I promise to pay George M. Saylor, or order, three thousand five hundred dollars, for value received, with interest at 8%. H. R. Bozorth. Indorsed as follows: June 10, 1889, $1250; Sept. 4, 1889, $400; Jan. 15, 1890, $550; May 20, 1890, $600. How much was due Dec. 20, 1890? THE VERMONT RULE. Apply the first payment to the liquidation of the interest due on the face of the note or the debt at the time the payment is made. If the payment exceeds the interest, apply the surplus to the reduction of the principal; and so proceed till the time of settlement. NOTE.-Interest is not allowed on the simple interest remaining unpaid before settlement. ANNUAL INTEREST. 187. Annual Interest is simple interest on the principal and each year's interest, if unpaid, from the time it is due until the day of settlement. Annual interest is charged when the words "with interest payable annually" are on the note. WRITTEN EXERCISES. 1. What is due on a note for $600 at 6% for 3 yr. 4 mo. 12 da., interest payable annually? The interest on $600 for 1 yr. at 6% is $36. Prin., $600 $36 $36 It is seen that the 1st year's interest is unpaid for 2 yr. 4 mo. 12 da. for 1 yr. 4 mo. 12 da. for 66 66 2d 66 3d 4 mo. 12 da. Hence $36 is on interest for 2 yr. 4 mo. 12 da. 4 yr. PROCESS. 1 mo. 6 da. 1 yr. 4 mo. 12 da. Principal Int. of $600 for 3 yr. 4 mo. 12 da. at 6% $36 $600 8.86 2. What is due on a note for $560 for 2 yr. 8 mo., interest payable annually at 6% ? 3. What is the annual interest of $1260 for 2 yr. 9 mo. 15 da. at 5%? 4. How much is due Apr. 1, 1894, on a note for $1000, dated July 15, 1891, interest payable annually at 8%, if the yearly interest has been regularly paid? 5. What is the annual interest of $1400 for 5 yr. 6 mo. 18 da. at 5% if the interest for the first two years has been paid? 6. What is due on a note for $840 at 51% for 4 yr. 8 mo. 18 da., interest payable annually, if the interest for the first year has been paid? Amount due. 4 mo. 12 da. 7. What is due on a note for $960 at 4% for 5 yr. 10 mo. 12 da., interest payable annually, if the interest for the first two years has been paid? |