286. To find the cost of a draft. $1.000 WRITTEN EXERCISES. 1. Find the cost of a sight draft for $800 when exchange is 11% discount. .015 = .985 = = $788.000, Ans. PROCESS. Rate of exchange. Cost of $1. $1.00 .01 DOMESTIC EXCHANGE. = Dis. for 60 da. .99 Cost of $1 at par. .015 Cost of $1. $804.000, Ans. = 2. Find the cost of a draft for $800, due 60 days after date, exchange being 14% premium. PROCESS. = The bank discount of $1 for 60 da. is $.01. The cost of $1 at par is $1 - $.01 = $.99. The cost of $1, with the premium, is $.99 $.015, or $1.005. The cost of $800 will be 800 times $1.005, which are $804.00. 3. Find the cost of a sight draft for $2000, exchange being 11% premium. 4. Find the cost of a sight draft for $1600 when the exchange is 2% discount. 5. Find the cost of a draft for $5000, due 30 days after date, if exchange is 13% discount. 287. To find the face of a draft. WRITTEN EXERCISES. 1. What is the face of a sight draft which can be bought for $3045 when exchange is at 11% premium? 6)60 .01 $1.00 = = If the premium is 1%, the cost of $1 will be $1.015. If the cost of the draft is $3045, its face will be as many dollars as $1.015 is contained times in $3045, which are $3000. .99 .0175 1.0075 2. Find the face of a 60-day draft, with interest at 6%, which can be bought for $4030 when exchange is at a premium of 14%. Dis. of $1. PROCESS. $1.015)$3045.($3000, Ans. = · Cost of $1 at par. = PROCESS. $1.0075)$4030($4000, Ans. 4030 Cost of $1. The bank discount of $1 for 60 da. is $.01. The proceeds of $1 is $.99. The cost of $1 of exchange is $.99 + $.0175 = $1.0075. If the cost of the draft is $4030, its face will be $4030 divided by $1.0075, which is $4000. 3. What is the face of a sight draft which can be bought for $484.80 when exchange is at 1% premium? 4. What is the face of a sight draft which can be bought for $5174.40 when exchange is at 2% discount? 5. What is the face of a draft, due 60 days after sight, with interest at 6%, which can be bought for $1173 when exchange is 11% discount? 6. What is the face of a draft, due 90 days after sight, with interest at 5%, which can be bought for $1809 when exchange is 12% premium? 7. I can purchase a 60-day draft on San Francisco for $7830 when exchange is 14% discount; what is the face? FOREIGN EXCHANGE. 288. A bill in foreign exchange is usually called a Bill of Exchange. Bills of Exchange are usually made out in sets of threebills, all of the same tenor and date, called the First, Second, and Third of exchange, respectively. To prevent loss and delay, each bill of a set is sent by a different mail. If any one of these is paid, the others become void. 289. Exchange on Great Britain or Ireland is quoted at the value of a pound sterling in United States money. Thus, sight drafts on a bank or banker in Great Britain or Ireland are quoted, "Bankers' Sterling, sight, $4.861." Drafts drawn on merchants, due 60 days after sight, are quoted, "Commercial Bills, 60 days, $4.821." Exchange on France is quoted at the number of francs in a dollar. Thus, sight drafts on France are quoted, “Francs, sight, 5.162," meaning that it takes 5.16 francs to make a dollar in United States money. Exchange on Germany is quoted at the value of 4 reichsmarks in cents. Thus, sight drafts on Germany are quoted, "Reichsmarks, sight, 953," meaning that 4 reichsmarks are worth $.953. $4.83 WRITTEN EXERCISES. 1. What will be the cost of a bill of exchange on London for £200 when exchange is quoted at 4.83? PROCESS. 200 $966.00, Ans. Since each pound sterling costs $4.83, £200 will cost 200 times $4.83, which are $966. 2. What will a bill of exchange on Paris cost for 1000 francs, exchange being quoted at 5.16? PROCESS. 5.165)1000.00($193.61+, Ans. 5165 48350 18650 15495 31550 30990 5600 PROCESS. 3. What is the cost of a bill of exchange on Berlin for 2000 marks, exchange at 94? $.94 500 $470.00, Ans. Since $1 will buy 5.165 francs, to buy 1000 francs it will take as many dollars as 5.165 is contained times in 1000, which are $193.61+. If 4 reichsmarks cost 94 cents, 2000 reichsmarks, which is 500 times 4 reichsmarks, will cost 500 times $.94, which are $470. 4. Find the cost of a draft on Liverpool for £500, exchange being 4.851. 5. Find the cost of a draft for £1000 on London, exchange at 60 days being 4.841. 6. Find the face of a draft on Glasgow which costs $1556, exchange being 4.861. 7. What will a draft on Paris for 5200 francs cost when exchange is 5.16? 8. What will a draft on Havre for 840 francs cost when exchange is 5.163? 9. A merchant paid $420 for a draft on Paris, exchange at 5.181; what was the face? 10. How much must be paid for a draft on Berlin for 6000 reichsmarks, exchange being 96? 11. Find the cost of a draft on Hamburg for 12600 reichsmarks, exchange at 931. DUTIES OR CUSTOMS. 290. Duties, or Customs, are taxes levied on imported goods. A Specific Duty is a fixed tax on goods without regard to their cost. An Ad-valorem Duty is a certain per cent. of the cost of the goods in the country from which they are imported. Tare is an allowance made for the weight of the box, cask, etc. containing the goods. Breakage is an allowance for the loss of liquors in bottles. Leakage is an allowance for the loss of liquors in casks. Gross Weight is the weight before any allowances are made. Net Weight is the weight after all allowances have been made. WRITTEN EXERCISES. 1. A merchant imported 400 yards of dress goods, invoiced at 8 francs a yard; what is the duty at 50% ad valorem ? PROCESS. PROCESS. 300 .95 285 .06 $17.10, Ans. If 1 yard cost 8 francs, 400 yards will cost 3200 francs. 2. What is the duty at 24 cents a gallon on 300 quart bottles of oil, breakage 5%? Since 1 franc is worth $.193, 3200 francs are worth $617.6, or $618. The duty is 50%, or .50 of $618, which is $309. Since the breakage is 5%, duty must be paid on 100% - 5%, or 95%, of 300 bottles, which are 285 bottles. The duty on 1 bottle is 6 cents, and the duty on 285 bottles is $17.10. 3. What is the duty, at 3 cents a pound, on 3750 pounds of tin, tare 10%? |