INTEREST 1. Mr. Johnston pays the liveryman $6 for the use of a horse and buggy for two days. What does he get in exchange for the $6 ? 2. Mr. Daniels pays $6 for the right to pasture his cow in a field for two months. What does he get in exchange for the $6? 3. Mr. Watson pays $6 for the use of $ 100 for one year. What does he get in exchange for the $6? 4. In the first two examples money is paid for the use of something that is not money. For what does Mr. Watson pay the money in the last example ? Interest is compensation for the use of money. Interest corresponds to the percentage in percentage. 5. How much does Mr. Watson pay for the use of the money? What is the $6 called ? 6. On what is the interest reckoned? The $100 is called the principal. The principal is the sum on which the interest is paid. The principal corresponds to the base in percentage. The rate of interest is a certain number of hundredths of the principal paid for the use of the principal for one year. Time is always a factor in interest. Interest, then, is the product of three factors: principal, rate, and time. The amount is the sum of the principal and the interest. Interest for Years and Months 1. What part of a year are 6 months ? 4 months ? 3 months ? 2 months ? 1 month ? 2. If the interest for a year is $100, what should it be for 6 months ? for 4 months ? for 3 months ? for 2 months ? for 1 month? Written Work 1. What is the interest on $200 for 2 years at 6%? $200 principal The interest for 1 year is .06 .06 rate of the principal, or $12. The in$12.00 interest for one year terest for 21 years is 2} $12, or 21 $30. $30.00 interest for 23 years Multiply the principal by the rate and the product by the number of years. The year is usually considered as 360 days, that is, 12 months of 30 days each. Find the interest on : 2. $300 at 5% for 1 year. 4. $150 at 61 % for 3 years. 3. $800 at 8% for 2 years. 5. $ 700 at 41 % for 4 years. Find the interest of : 6. $250 for 13 years at 4%. 11. $500 for 2 years at 41 %. 7. $75 for 2 years at 8 %. 12. $960 for 9 mo. at 6 %. 8. $100 for 3 years at 7 %. 13. $900 for 24 years at 7 %. 9. $80 for 43 years at 5%. 14. $654 for 4 year at 6%. 10. $40 for 23 years at 61%. 15. $220 for year at 8%. Interest for Years, Months, and Days 1. What part of a month (30 days) are 15 days ? 12 days? 20 days ? 3 days ? what part is 1 day? 2. If the interest for 1 year is $360, what is the interest for 1 month ? If the interest for 1 month is $ 30, what is the interest for 1 day? for 15 days ? for 12 days ? Written Work 1. Find the amount of $ 200 at 6% interest for 2 yr. 7 mo. 12 da. Principal = 8200 Rate .06 Int. for 1 yr. = $12.00 = 2 x $12.00 or $24.00 1 of $12.00 7.00 Int. for 12 da. = }} or of $1.00 or .40 Int. for 2 yr. 7 mo. 12 da. = $31.40 $200.00 $231.40 7 mo. or Study of Problem a. What is the first step in the work ? the second step? 6. How do we find the interest for 1 month ? for 7 months ? for 12 days? c. What new term is introduced in interest ? For what length of time is rate of interest always considered ? Find the interest and amount of : 2. $ 300 for 3 yr. 6 mo. at 6%. Find the interest and amount of : 17. $ 250 at 8% for 3 yr. 5 mo. 20 da. 10 mo. 11 da. 24. $ 634.50 at 8 % for 11 mo. 12 da. 25. Henry Boydson borrows $275 Sept. 1, 1906, at 6% interest, and settles the note Jan. 1, 1908. Find the amount of the note at settlement. The one dollar six per cent method of finding interest. Since the interest on 1 dollar for 1 month is 1 ¢ and for 1 day à mill, change the years and months to months. The interest on each dollar will be į as many cents as there are months and | as many mills as there are days. Multiply the sum by a number equal to the number of dollars. The interest at any other rate may be found as follows: 1%= 1 of 6% 5%= 6%-} of 6% 2%= 1 of 6% 7%= 6% + 2 of 6% 3%= 1 of 6% 8%= 6% + of 6% 4%= 4 of 6% 9%= 6% + 1 of 6% Write the interest on 1 dollar at 6% for : 2. 12 mo. 6. 1 yr. 2 mo. 12 da. 3. 8 mo. 7. 1 yr. 6 mo. 15 da. 4. 16 mo. 8. 1 yr. 9 mo. 12 da. 5. 8 mo. 18 da. 9. 2 yr. 4 mo. 18 da. Written Work 1. Find the interest and amount of $ 300 for 1 year 10 months 19 days at 6% ; at 8%. 1 yr. 10 mo. = 22 months. Int. on $1 at 6% for 22 mo. = $.11 Int. on $1 at 6% for 19 da. .0033 or $33.95 (to the nearest cent). $33.95 int. + $300 prin. = $333.95, amount. At 8% the interest will be $33.95 + (} of $33.95), or $45.27, and the amount $345.27. |