RULE. To find the bank discount, compute the interest on the sum due at maturity for the term of discount.

To find the proceeds, subtract the bank discount from the sum due at maturity.

EXAMPLES.

Find the bank discount on the following notes:

3. $280, dated June 1 for 60 days, discounted July 1 at 6%. 4. $510, dated Feb. 6 for 90 days, discounted Mar. 15 at 6%. 5. $435, dated May 20 for 2 mo., discounted May 31 at 6%. 6. $246.85, dated Jan. 16 for 3 mo., discounted Feb. 25 at 5%. 7. $615.38, dated Sept. 18 for 4 mo., discounted Nov. 1 at 7%. Find the proceeds of the following notes:

8. $175, dated May 4 for 30 days, discounted on date of issue at 6%.

9. $745, dated July 5 for 3 mo. 12 da. (grace) and discounted Aug. 17 at 6%.

10. $575, dated Oct. 27 for 60 days, discounted Nov. 1 at 8%. 11. $930, dated Aug. 27 for 2 mo. 20 da. (grace), and discounted Sept. 10 at 7%.

12. $648, dated Mar. 13 for 3 mo. discounted Apr. 10 at 6%.

13. A note for $500, payable in 3 months was dated and discounted Apr. 1, 1898, at 6%. What was the date of maturity, and the proceeds?

14. A note for $750, payable in 4 months (grace) was dated and discounted Mar. 3, 1899. Find the proceeds when discounted at 6%.

15. A 90-day note for $800 was dated June 14, 1899. It was discounted July 20, 1899, at 6%. Find the discount and the proceeds.

16. Find the date of maturity and the proceeds of a note dated Sept. 12, 1898, payable in 90 days for $1200 with interest at 6%; discounted Oct. 10, 1898, at 6%.

17. Find the date of maturity and the proceeds of a note dated Apr. 2, 1900, payable in 6 months for $575, with interest at 5%; discounted June 25, 1900, at 6%.

18. What is the difference between the true discount and the bank discount of $960, due in 3 yr. 4 mo., money worth 6%, not considering days of grace?

Find the date of maturity, term of discount, and the proceeds of the following notes:

19. $700.

BOSTON, MASS., July 21, 1903.

Three months after date I promise to pay J. H. Gise, or order, Seven Hundred Dollars, for value received, at the First National Bank.

Discounted Aug. 4, 1903, at 6%.

20. $1000.

HARRY HALL.

GALVESTON, TEX., Jan. 6, 1904.

Sixty days after date, for value received, I promise to pay to the order of G. W. Minick, One Thousand Dollars, at the City National Bank.

Discounted Feb. 7, 1904, at 6%.

F. S. WELLS.

21. $275.

BUFFALO, N. Y., Apr. 30, 1904.

Four months after date I promise to pay D. A. Kann, or order, Two Hundred Seventy-five and 35 Dollars.

100

Discounted June 2, 1904, at 6%.

Value received.

E. P. BALDWIN.

Days of grace have been abolished in Mass. (except Sight Drafts). Art. 620.

22. $456.

DENVER, COL., Sept. 1, 1904.

Ninety days after date, we promise to pay J. A. Riker, or order, Four Hundred Fifty-six Dollars, for value received, at the Park National Bank.

Discounted Sept. 1, 1904, at 8%.

W. H. WATT.
T. L. NASH.

23. $1541.

DETROIT, MICH., May 28, 1904.

Five months after date, either of us promises to pay John Crusey, or order, Fifteen IIundred Forty-one Dollars, for value received, with interest at 6%.

J. M. BELL.

C. C. CARR.

Discounted July 2, 1904, at 6%.

SAN FRANCISCO, CAL., Aug 10, 1904.

24. $850. Six months after date we, or either of us, promise to pay J. E. Johnson, or order, Eight Hundred Fifty Dollars, with interest at 6%.

Value received.

Discounted Nov. 1, 1904, at 8%.

25. $2000.

J. M. LEE.

C. R. PAUL.

PHILADELPHIA, PA., Apr. 2, 1904.

Three months after date, for value received, I promise to pay Geo. W. Polk, or order, Two Thousand Dollars, with interest at 6%, without defalcation.

Discounted Apr. 30, 1904.

See note 2, Art. 635.

CHAS. R. DICKINSON.

638. Given the time, the rate, and the proceeds or the discount, to find the face.

1. I wish to borrow $200 from a bank. For how much must I give my note at 60 days, discounting at 6% ?

$1.00 .01

$.99

EXPLANATION.-The discount on $1 for (0 days is .01. Hence, the proceeds of $1 is $1 minus $.01, or $.99. If the proceeds of $1 is $.99, to yield $200 proceeds, it will require a note whose face is as many dollars as $.99 is contained times in $200, which are $202.02.

$200.99

$202.02

RULE.-To find the face of a note, divide the given proceeds of $1 for the given time and rate; or divide the discount by the discount of $1.

EXAMPLES.

2. What is the face of a note at 90 days, the proceeds of which, discounted at 6%, are $500?

3. For what sum must a note be drawn at 60 days to net $2400, when discounted at 6% ?

4. The discount at 6% on a 90-day note was $15. What was the face of the note?

5. Mr. Adams paid $24 discount for having a 6 months note discounted at 8%. What was the face of the note?

6. Mr. Hardup owing $450, gave a 60-day note which was discounted at 10%. What was the face of the note required to pay the exact debt?

STOCKS AND BONDS.

639. A Company is a number of persons associated together for the purpose of carrying on some business enterprise. It may or may not be incorporated.

640. A Corporation is an incorporated company authorized by law to transact business as a single individual.

A natural person may do anything not prohibited by law, while a corporation can do nothing but what is expressly permitted by its charter.

641. A Franchise is a right granted by the State to individuals or to corporations. Thus, the franchise of a railroad is the right to build and operate its road.

642. A Charter is a contract with the Government which defines the powers and limitations of a corporation.

One of the advantages of a charter is that it usually limits the liability of each stockholder to the amount he has contributed, while a member of an unincorporated company or firm is liable for all the debts of the partnership.

643. The Capital Stock of a company is the capital or funds (property) invested in the business.

This capital may be increased or diminished by a vote of the majority of the stockholders, representing a majority of the stock.

644. A Share is one of the equal parts into which the capital stock is divided. A share usually represents $100 of the capital stock, though it may be of any value agreed upon by the members of the corporation. The owner of stock is called a Stockholder.

645. A Stock Certificate is the paper issued by a company or corporation to its stockholders, signed by the proper officers of the company, certifying that they are the owners of a stated number of shares of its capital stock at a certain par valuation.

These certificates are transferable by assignment and may be bought and sold the same as other property.

646. The Par Value of a share is the value specified in the cer tificate and is usually $100.

647. The Market Value of a share is the price at which it can be sold.

When the market value of the shares is greater than their par value, as is the case when the business is very profitable, they are said to be above par, or at a premium; when the market value is less than the nominal value the shares are below par, or at a discount (business is unprofitable).

648. The Gross Earnings of a company are the total receipts of the business before the expenses have been paid.

649. The Net Earnings of a company are what is left of the gross earnings after all expenses have been paid.

The net earnings of a company are its clear profits, or net gains.

650. A Dividend is such portion of the profits of a corporation as is divided among its stockholders. It is not customary to pay a larger dividend than good interest on the capital invested.

Stocks sell Dividend-on between the time the dividend is declared and the day the books of the company close for transfer. After that date they sell ex-dividend, i. e., the dividend does not go to the buyer.

651. A Surplus Fund is a fund created out of the profits remaining after expenses and dididends have been paid. This excess belongs to the stockholders.

652. An Assessment is a sum levied upon stockholders to make up losses, to meet expenses, or to provide for improvements.

653. Common Stock is the capital stock subscribed by the original organizers of a corporation.

654. Treasury Stock is a certain number of shares set aside to be sold from time to time to secure working capital.

655. Preferred Stock is that which has preference when dividends are declared.

1. The holder of preferred stock will receive interest theron out of the profits of the business before the holder of common stock receives any share of such profits.

2. Preferred stock is frequently issued in an effort to raise money when a company is financially embarrassed. To those who extend pecuniary aid at such a time, preferred stock is issued which entitles the holder to a dividend of a specified rate per cent. before any dividends can be declared on the common stock.

› 656. Guaranteed Stock expresses on its face the guaranty of a certain dividend.