BANKS AND BANKING. [a] The sum due at maturity is the principal or base [multiplicand]. [b] The bank discount and the proceeds of bank discount are percentages [products]. [c] The rate per cent. for the term of discount is the rate [multiplier]. [d] Since the proceeds equal the sum dye at maturity minus the discount, the rate of proceeds must equal the rate of the sum due at maturity [100%] minus the rate % of discount for the given time. To find the bank discount or proceeds of a note, when the rate and term of discount are given. INDUCTIVE EXERCISE. 1. If a note be nominally payable in 57 days from its date, in how many days will it be legally payable? At 6% per annum, what is the rate % of discount for 60 days? The rate % of proceeds for 60 days? 2. What are the bank discount and the proceeds of a note of $1000, if the rate of discount be 6% per annum and the term of discount 30 days? 60 days? 90 days? 120 days? [e] Sum due upon any note at maturity X rate of discount for the given time = bank discount. EXAMPLES. Find the date of maturity, term of discount, bank discount, $218,25%. [11.] Demand Note. BALTIMORE, MD., Jan. 30, 1884. On demand, for value received, I promise to pay Samuel Wolverton, or bearer, Two Hundred and Eighteen 25 Dollars with interest. R. C. CLAY. What would have been the sum due upon the above note, if it had been presented for payment Feb. 19, 1884 ? $3000. [12.] Time Note [without interest]. DAYTON, OHIO, June 3, 1883. Three months after date, for value received, I promise to pay GEO. C. ROUND, or order, Three Thousand Dollars. JOSEPH S. SINCLAIR. Find the term of discount, the discount, and the proceeds, if the above note had been discounted at bank July 15, 1883, at 8%. $790,3%. [13.] Time Note [with interest]. 80 100 NEW YORK, May 3, 1884. Ninety days after date, I promise to pay JOHN ARMSTRONG, or bearer, Seven Hundred and Ninety Dollars, with interest at 6%. Value received. W. A. MARBURY. What would have been the discount and the proceeds, if the above note had been discounted June 24, 1884, at 8%? [14.] Joint Note. $538. What are the date of maturity, the term of discount, the discount, and the proceeds of the above note, if discounted at bank Nov. 13, 1883, at 6%? $489,4%. [15.] Joint and Several Note. BOSTON, Dec. 8, 1883. One month after date, we jointly and severally promise to pay to the order of HENRY BLACK, Four Hundred and Eighty-nine Dollars. Value received. 42 J. E. PRYOR. W. O. HOLMES. What are the date of maturity, the term of discount, the discount, and the proceeds of the preceding note, if discounted at bank Dec. 12, 1883, at 8%? $500. [16.] Note payable at a bank. PHILADELPHIA, May 2, 1883. Ninety days after date, I promise to pay to JAMES E. MINOR, or order, Five Hundred Dollars, without defalcation, at the First National Bank. Value received. FRANK S. THORNE. What were the discount and the proceeds of the above note, if discounted at the bank June 18, 1883, at 8%? [17.] Note payable to one's own order. NEW ORLEANS, Oct. 15, 1883. $600. What are the proceeds, of the above note, if discounted at bank Nov. 2, 1883, at 9%? 18. A note of $1800, dated June 16, 1883, bearing 6% interest, and payable 4 months after date, was discounted at bank June 29, 1883, at 6%. What were the bank discount and the proceeds? 19. A note of $1200, dated June 13, 1883, and payable 4 months after date, was discounted at bank July 2, 1883. What were the date of maturity, the term of discount, the bank discount, and the proceeds of the note, the rate of bank discount being 6% ? 20. What is the difference between the bank discount and true discount of a note of $2500, dated Sept. 1, 1883, and payable 3 months after date with interest at 6%, if discounted on the day of issue at 8% ? 21. Henry Gould & Co. offered at bank the following, which were passed and discounted Sept. 6, 1883, at 6%: Note dated July 30, 1883, at 4 months, for $850.25. What was the discount on each note, and the amount of proceeds passed to their credit? 22. J. K. Hopper's draft of $1500 drawn on J. E. Morse, favor of Wm. J. Robb, dated Oct. 31, 1884, payable 90 days after date, and accepted Nov. 3, 1884, was discounted for E. C. Williamson, Dec. 7, 1884. Rate of discount 5%. Find the date of maturity, term of discount, discount, and proceeds. 23. A bank discounted, July 2, 1884, for Wm. H. Patrick, a note of A. M. Sellers for $1250, dated June 9, 1884, and payable 4 months after date. Rate of discount 6%. Find the date of maturity, unexpired time, discount, and proceeds. 24. A merchant discounted Aug. 19, 1883, at 7%, a note of G. W. H. Carr, endorsed by Wm. A. Heitmueller, for $439.50, dated July 7, 1883, and payable 90 days after date. Find the date of maturity, unexpired time, discount, and proceeds. 25. A draft dated July 10, 1884, drawn by E. H. Norman, Milwaukee, on Daniel Slote & Co., New York, payable sixty days after sight, and accepted July 16, 1884, was discounted Aug. 3, 1884. If the face of the draft was $1123.40, and the rate of discount 5%, what were the date of maturity, term of discount, discount, and proceeds? 26. On Aug. 10, 1883, T. W. Jamison had discounted his note endorsed by W. H. Devon, due Oct. 9, 1883. If the rate of discount was 71%, and the amount of the note $650, what were the discount and proceeds? 27. Discounted for J. H. Elliott the following notes. No. 1. Dated Oct. 28, payable 4 months after date, $1000. Find the date of maturity, term of discount, discount, and proceeds of each, if the rate charged was 41%. 28. John Ryan & Co. offered at bank the following paper, which was passed and discounted Oct. 3, 1884, at 6%: Note dated July 17, 1884, @ 4 months, $763.20 What was the amount of proceeds passed to their credit? 29. A note of $1750, dated March 12, 1885, payable four months after date with 7% interest, was discounted June 7, 1885, at the rate of 6%. What were the net proceeds? To find the face of a note, when the proceeds, the time, and the rate % of discount are given. INDUCTIVE EXERCISE. 1. At 6% per annum, what is the bank discount of $1 for 2 months? What, therefore, will be the proceeds of $1 for the same time and at the same rate per annum? If the proceeds of $1 are 99 cents, of how many dollars, with the same time and rate, will $9.90 be the proceeds? Will $99? $19.80? $198? $297? $29.70? $297 ? 2. What term of percentage corresponds to proceeds? Hence, by what must the proceeds of a non-interest bearing note be divided to find its face, or the base? How is the rate of proceeds obtained? [f] The proceeds of any note is as many times the proceeds of $1, as the sum due at the maturity of such note is times $1. [g] Proceeds of note + proceeds of $1 = face of note. 42. I owed a firm $750, and, in payment thereof, drew a 90-day note, the proceeds of which, when discounted at 6%, equaled the debt. What was the face of the note? 43. The holder of a note dated Oct. 15, 1883, and payable 4 months after date, had it discounted at bank Dec. 17, 1883, at 8% per annum. What was the face of the note, if the bank discount was $19.60 ? 44. What must be the face of a note payable 4 months after date that, when discounted at 6%, the proceeds will exactly pay a debt of $1000? 45. For what sum must a 30-day note be drawn that, when discounted at 8%, the maker may realize $500 as proceeds? 46. I owed $6000, and, to pay it, I had a note of $3500, maturing in 18 days, discounted by a bank at 8%, and drew a second note, payable in |