Exercise XL Find the simple interest on: 1. $370 for 2 years at 5%. 2. $890 for 1 year 4 months at 9%. 3. $1342 for 8 months at 10%. 4. $1 for 30 days at 6%. 5. $1 for 1 day at 1%. Find the amount of: 6. $1568 for 5 yr. 8 mo. 18 da. at 8%. 7. $4698.58 for 6 yr. 7 mo. 25 da. at 52%. Find the rate required for: 8. $400 to produce $57 int. in 1 yr. 7 mo. 9. $900 to produce $25.20 int. in 8 mo. 12 da. Find the time required for: 10. $500 to produce $55 interest at 8%. 11. $2500 to produce $131.25 interest at 7%. Find the principal required to produce: 12. $25.20 interest in 1 yr. 9 mo. at 4%. 13. $35 interest in 3 mo. at 14%. Find the principal which amounts to: 14. $751.20 in 6 mo. 15 da. at 8%. 15. $2516.66 in 30 da. at 8%. 16. $240.50 from Sept. 1 to Dec. 31, at 4%. Find the interest (bankers' interest method) on: 17. $385 from Aug. 12, 1891, to Nov. 1, 1891, at 12%. 18. $840 from May 12, 1904, to Sept. 5, 1904, at 8%. Find the exact interest on: 19. $850 from Jan. 15, 1904, to June 20, 1904, at 8%. 20. $125 from Jan. 20, 1905, to Nov. 19, 1905, at 6%. 21. On what date, counting from Jan. 15, will $200 at 6% produce as much accurate interest as it would ordinary interest from Jan. 15 to Sept. 15? Miscellaneous: 22. What principal at 6% will amount to $450 in 5 years? 23. Mr. Roe borrowed $1575 on the 1st of April. On the 1st of November following he paid the amount, which was $1630.125. What rate of interest did he pay? 24. In what time will any principal double itself at 8%? 25. At what rate will any principal double itself in 12 years? 26. What is the difference between the true discount of $248.76, due in 2 yr. 3 mo. 15 da., and the simple interest on the same amount for the same time, money being worth 6%? 27. A note of $87.50, dated Aug. 8, 1901, and bearing interest at 10%, was paid March 25, 1903. What was the amount paid? 28. Find the amount of $63.96 for 1 yr. 7 mo. 10 da., at 61%. 29. What is the interest on a note of $600, dated June 10, 1900, and paid Jan. 3, 1901, at 5% interest? 30. A man who has $1650 in a savings bank receives $41.25 every 6 months. What per cent interest does he receive on his money? THREE IMPORTANT RULES: Multiply the principal by the rate and the result by the time expressed in years, and the result will be the simple interest. 2. To find the present worth: Divide the debt by the amount of $1 for the given time and rate, and the quotient will be the present worth. 3. To find the true discount: Subtract the present worth from the debt, and the re mainder will be the true discount. II. BANK DISCOUNT 345. A bank is an institution authorized by law for the safe-keeping, loaning, and issuing of money. 346. Bank discount is the sum deducted by a bank for paying a note or draft before it is due, or the sum charged for lending money. It is simple interest on the maturity value of a note or draft for the time it has yet to run. 347. The term of discount is the time from the date of discount to, and including, the date of maturity. 348. The date of maturity is the last day of grace (in states allowing 3 days of grace) or the day on which the note is legally due. NOTE 1.—Many of the states have abolished the law allowing 3 days of grace. For your own state, see table, p. 159. NOTE 2.-Notes falling due on a legal holiday, or on Sunday, mature and are payable on the preceding or succeeding business day, according to the law or custom of the locality. See p. 159. 349. The proceeds (called also net proceeds) of a note or draft is the difference between the maturity value and the bank discount. NOTE.-In bank discount, 3 days of grace are considered in this book. EXAMPLES 1. Find the bank discount and proceeds of a note of $500, due in 90 days, discounted at 8%. SOLUTION: 93 days. 3. $500 – $10.33} = $489.663 = proceeds. 2. I wish to borrow $1800 for 90 days. For what sum must the note be made, if the bank discounts it at 8%? SOLUTION: 3. $1100. MARLIN, TEX., July 5, 1904. Three months after date, I promise to pay David Doe, or order, eleven hundred dollars, at the Merchants' National Bank, with interest at 6%. Value received. JOHN ROE SOLUTION: 3. $1100 + $17.05 = $1117.05 the maturity value. 4. The term of discount is from Aug. 5 to Oct. 8, or 64 days. 5. The int. on $1117.05 for 64 days at 6%=$11.92=bank discount. 6. $1117.05 – $11.92 = $1105.13, the proceeds. Exercise XLI Find the bank discount and proceeds of a note: 4. A merchant is offered $3000 worth of goods on 3 months' time, or 5% off for cash. If he borrows the money at the bank, at 7%, and pays cash, will he gain or lose, and how much? 5. A man borrows $1000 for 60 days; bank discount is 8%. Find the face of the note. 6. A note of $600 dated July 28, at 3 months, was discounted at bank Sept. 5, at 8%. Find the proceeds. 7. $1200. SPRINGFIELD, ILL., Aug. 5, 1903. Ninety days after date, I promise to pay Tom Johnson, or order, twelve hundred dollars, for value received, at the City National Bank. BILL WILLIAMS. Find the proceeds, if discounted Sept. 2, 1903, at 8%. 8. $640. Macon, GA., March 10, 1903. Five months after date, I promise to pay to the order of Henry Babb, six hundred forty dollars, for value received, with interest at 6%. M. P. RYE. |