Exercise 16. Savings Accounts

Savings Banks usually pay 3% or 4% interest on savings accounts. The interest is usually paid semi-annually (every 6 months) and is added to the savings account if the depositor does not withdraw the interest. No interest is paid on sums withdrawn between interest-paying dates. Each savings bank has certain rules about the payment of interest.

Pupils who have savings accounts should bring their bank books to the class, read the rules in regard to interest, and have the class compute the interest for the various amounts deposited.

1. Find the amount of a savings deposit of $80 made January 1, 1916, on January 1, 1917, if no deposits are made during that time. The interest is 3% per annum, payablė semi-annually.

$80 deposit, January 1, 1916.

1.20 interest at 3% for 6 months. $81.20 amount July 1, 1916.

1.22 interest at 3% for 6 months. $82.42 amount due January 1, 1917.

The interest on $80 for 1 year at 3% is $2.40. For 6 months the interest is of $2.40, or $1.20. This interest is added to the original deposit of $80, making $81.20. The depositor gets 3% interest on this

amount from July 1, 1916 to January 1, 1917. The interest on $81.20 for 6 months at 3%-$1.22. $81.20+$1.22= $82.42, the amount due January 1, 1917. Most banks do not pay interest on fractional parts of a dollar. The interest on $81 for 3% for 6 months = $1.215 or $1.22, so in this case there would be no difference whether the fractional part of a dollar were counted or not.

2. Find the amount of interest on a savings account of $45 at 3% for 6 months.

3. John Millish saved $72 from his garden project and put this in a savings bank, October 1, 1916. If he makes no deposits before January 1, 1917, what amount will he have to his credit at that interest-bearing date, the interest being computed semi-annually at 3%?

4. Albert Evans deposited $25 in a savings bank on July 2; $10 on September 1; $16 on October 2 and $12 on November 1. He made no withdrawals. According to the rules of his bank, any deposits made in the first 5 days of any month bear interest beginning with the first of the month. Find the amount of interest, at 3%, to January 1, as follows:

Savings banks usually follow the practice of subtracting any withdrawals from the amount on deposit at the last interestbearing date. Note this point in solving the next problem.

5. On July 1 Dorothy had $44 in her savings account. She deposited $16 on August 21 and $8 on October 1. On October 19 she withdrew $10 from her account. How much interest, at 3%, should she receive on January 1?

The withdrawal, $10, must be subtracted from her balance on July 1. $44-$10-$34. She will get interest, then, on $34 from July 1 to January 1. The deposit of $16 on August 21 will not begin to draw interest until September 1 according to the method of counting only whole months.

6. Find the interest on the following savings account on July 1 at 3%: Balance, January 1, $32.25; Deposits: February 1, $5.50; April 2, $6.00; May 2, $3.00; Withdrawal, March 28, $4.00. Do not count fractional parts of a dollar (cents) in computing the interest.

7. Anna made $45.00 in raising poultry one year. She put this in a savings bank on January 1, 1916. How much will she have to her credit on January 1, 1918, if she does not make any deposits or withdrawals? Compute the interest at 3% semi-annually and do not count fractional parts of a dollar.

Exercise 17. Discounts

Philadelphia, Pa., May 11, 1917

Harrison & Manly
Sold to R. C. Fletcher

TERMS 2% 10 DAYS NET. 30 DAYS

Most large firms allow a small reduction for prompt payment of a bill. In the illustration shown above, the terms are 2% reduction if the bill is paid in 10 days, or the full amount, or net, if the purchaser does not pay until after the expiration of the ten days. The reduction for cash or prompt payment in that bill amounted to $2.77. This reduction is called a discount.

Discounts are also allowed in reduction sales, which are common in large stores. The price that is placed on the article before it is discounted is called the list price.

1. A book dealer is allowed a discount of 20% from the list prices of books. How much does he pay for books listed at $1.25 each?

20%. of $1.25=$.25. $1.25 the list price-$.25 “off” (or the discount)=$1.00, the cost of the book.

2. A clothing store advertises a special sale on women's coats, listed at $30, at a discount of 33%. What is the sale price of the coats?

3. A hardware dealer secured a discount of 2% for prompt payment on a bill of goods amounting to $384.50. What was the net amount of the bill?

4. A school bought a piano from a local dealer priced at $450 at a discount of 20%. What did the piano cost the school?

5. A lumber dealer bought a bill of lumber amounting to $1240. He was allowed 3% discount for paying cash. How much was the amount of his discount? What was the net amount of his bill after deducting the discount?

6. Find the sale price at a special sale of 20% discount on goods listed at the following prices:

7. A druggist advertised $9.00 cameras at a discount of 15%. What was his sale price on the cameras?

8. In order to dispose of his supply of straw hats late in the season, a dealer advertised a 50% discount sale on all straw hats in his store. What was the sale price on a $4.00 hat; a $3.00 hat; a $5.00 hat?

9. A clothing store sold overcoats listed at $30.00 for $24.00. What was the per cent of discount on the coats?

10. A shoe store sold $6.00 Oxfords late in the summer for $4.00. What per cent discount did they give on the shoes?

CHAPTER V

HOME ACCOUNTS AND EXPENSES

Exercise 1. The Family Budget

A family budget is a definite plan for distributing a family income. In a budget the regular expenses of a family are grouped under four or more headings with a certain per cent of the income assigned to each. The following budget shows the expenses for one month of a family of four, two adults and two children.