COMMISSION, BROKERAGE, AND STOCKS. 226. Percentage is applied to various calculations in the practical concerns of life. Among the most important of these are Commission, Brokerage, the Rise and Fall of Stocks, Interest, Discount, Insurance, Profit and Loss, Duties and Taxes. 227. Commission is the per cent. or sum charged by agents for their services in buying and selling goods, or transacting other business. OBS. An Agent who buys and sells goods for another, is called a Commission Merchant, a Factor, or Correspondent. 228. Brokerage is the per cent. or sum charged by money dealers, called Brokers, for negotiating Bills of Exchange, and other monetary operations, and is similar to Commission. 229. By the term Stocks, is meant the Capital of moneyed institutions, as Banks, Manufactories, Railroad and Insurance Companies; the funds of Government, State Bonds, &c. OBS. Stocks are usually divided into portions of $100 each, called shares; and the owners of these shares are called Stockholders. 230. The original cost or valuation of a share is called its nominal, or par value; the sum for which it can be sold, is its real value. OBS. 1. The rise or fall of Stocks is reckoned at a certain per cent. of its par value. The term par is a Latin word, which signifies equal, or a state of equality. 2. When stocks sell for their original cost or valuation, they are said to be at par; when they sell for more than cost, they are said to be above par, or at a premium; when they do not sell at cost, they are said to be below par, or at a discount. 3. Persons who deal in Stocks are called Stock Brokers, or Stock Jobbers. 231. Commission and brokerage are reckoned at a certain percentage on the amount of money employed in the transaction; the rise and fall of stocks, on the par value of the given shares. QUEST.-227. What is commission? Obs. What is an agent who buys and sells goods for another called? 228. What is brokerage? 229. What is meant by stocks? Obs. How are stocks usually divided? What are the owners of the shares called? 230. What is the par value of stocks? What the real value? Obs. What is the meaning of the term par ? When are stocks at par? When above par? When below? 231. How are commission and brokerage reckoned? How the rise or fall of stocks? Ex. 1. A commission merchant sold a quantity of corn for $236, and charged 2 per cent. commission: how much did he receive for his services? Suggestion. We multiply the amount for which the corn was sold, by the given per cent. expressed in decimals as in percentage, and the result $4.72, is the answer required. Hence, Operation. $236 .02 Ans. $4.72 232. To compute commission, brokerage, and the premium or discount on stocks. Multiply the sum by the given per cent. expressed in decimals, and point off the product as in multiplication of decimals. 2. A tax-gatherer collected $533.56, for which he was to have 3 per cent. commission: what did he receive? 3. An auctioneer sold $860.45 worth of goods, at 21 per cent. commission: how much did he receive? 4. An agent sold a quantity of oil for $265.35, and charged 2 per cent. commission: how much did the agent receive, and how much the owner? 5. Sold goods to the amount of $356, at 41 per cent. commission: how much did I receive for my services? 6. Bought goods amounting to $480, at 31 per cent. commission: what is the amount of my commission? 7. What is the commission on $163.625, at 6 per cent.? 8. What is the commission, at 5 per cent. for purchasing flour to the amount of $1365.25? 9. I send my agent $1000 to be invested in cotton, after deducting his commission at 5 per cent.: what is his commission, and how many dollars worth of cotton shall I receive? Suggestion. Since $1000 includes both the commission and the sum invested, it is plain that the agent ought not to take 5 per cent. of $1000; for this would be charging commission on his commission. He is entitled to 5 per cent. on that part only which he invests. Now the sum invested is 100 of itself, and the commission is 5 of this sum; consequently, the commission added to the sum invested must be 105 of the in vestment. QUEST.-232. What is the rule for computing commission, brokerage, &c. ? The question then resolves itself into Operation. this: $1000 is 105 of what sum? Now $1.05)$1000($952.38 the numerator 105, is equal to 100 cents increased by the 5 per cent. commission, or $1.05. We therefore divide the given amount $1000 by 1 dollar increased by the per cent. commission, or $1.05, anhexing ciphers to the remainder, and the quotient $952.38 is the sum invested. Subtracting the part invested from the whole amount, $1000-$952.38 leaves $17.62, the commission. Hence, 945 550 525 250 210 400 315 850 840 10 232.a. When the commission is to be deducted in advance from a specified sum and the balance invested. Divide the given sum by $1 increased by the per cent. commission, and the quotient will be the part to be invested. Subtract the part to be invested from the given sum, and the remainder will be the commission required. OBS. The commission may also be found by multiplying the sum invested by the given per cent, according to the preceding rule. (Art. 232.) 10. A man sent a broker $10478.13 to lay out in stocks after deducting his brokerage, at per cent.: what was the brokerage, and how much stock did he receive? 11. A merchant negotiated a bill of exchange of $5000 with a broker, and agreed to give him 7 per cent.: how much did the broker receive? 12. What is the brokerage on $8265, at 51 per cent.? 13. What is the brokerage on $6524.13, at 8 per cent. ? 14. What is the commission on $146.356, at 20 per cent.? 15. What is the commission on $1625.75, at 25 per cent.? 16. What is the commission on $25026.10, at 15 per cent.? 17. What is the brokerage on $50265.95, at 3 per cent.? 18. What is the brokerage on $38212.085, at 1 per cent.? 19. What is the brokerage on $752600, at 1 per cent.? 20. What is the brokerage on an investment of $1000000, at per cent.? QUEST.-232.a. How proceed when the commission is to be deducted in ad 21. Bought 10 shares of bank stock, for which I paid 4 per cent. premium: how much did the stock cost me? Suggestion. The stock manifestly cost me its par value, viz : $1000, together with 4 per cent. of it. (Art. 229. Obs.) Now $1000 × .04=$40; and $1000+$40-$1040. Ans. 22. A man bought 5 shares of the Boston and Providence Railroad stock, at 51 per cent. premium: what did his stock cost him? 23. A broker sold 15 shares of the New York and Erie Railroad stock, at 15 per cent. discount: what did they come to? 24. Sold 29 shares in the American Manufacturing Co., at 16 per cent. advance: what did they come to? 25. A stock jobber bought 45 shares of the Auburn and Rochester Railroad stock at 3 per cent. discount, which he sold at 7 per cent. advance: how much did he make by the transaction? 26. A widow invested $9000 in the Commonwealth Bank stock at par, and finally sold it at 75 per cent. discount: how much did she lose? 27. A man owned 53 shares of the Long Island Railroad stock, which he sold at auction, at 13 per cent. premium: how much did they come to? 28. Bought 38 shares in the Union Gas Co. at 7 per cent. advance, and sold them at 5 per cent. discount: how much was my loss? 29. An agent received $25265 to invest in land, after deducting 3 per cent. commission: what was his commission? 30. Received $62470 to lay out in iron, after deducting 2 per cent. commission: what sum have I to lay out? 31. Sold 5 pieces of cloth, each containing 31 yds., at $3.87 per yard, and charged 21 per cent. commission, and 3 per cent. for guaranteeing the payment: how much shall I pay over? 32. Sold 65 bales of cotton, averaging 4831 lbs. to a bale, at 4 cents a pound: what is my commission at 31 per cent.? 33. Suppose you consign 365 bushels of wheat to your agent; he sells it at 87 cents per bushel, and charges 43 per cent. commission and guaranty: how much will you receive for your wheat? INTEREST. 233. INTEREST is the sum paid for the use of money by the borrower to the lender. It is reckoned at a given per cent. per annum; that is, so many dollars are paid for the use of $100 for one year; so many cents for 100 cents; so many pounds for £100, &c. 234. The money lent, is called, the principal. The per cent. paid per annum, is called the rate. The sum of the principal and interest, is called the amount. Thus, suppose I lend a man $100 at 7 per cent., and at the end of the year he pays me $100 the sum lent, and $7 for the use of it: the principal, in this case, is $100; the rate, 7 per cent.; the interest, $7; and the amount, $107. OBS. The learner should be careful to notice the distinction between Commission and Interest. The former is reckoned at a certain per cent. without regard to time; (Art. 231 ;) the latter is reckoned at a certain per cent. for one year; consequently, for longer or shorter periods than one year, like propertions of the percentage for one year are taken. The term per annum is a Latin phrase, which signifies by the year. 235. The rate of interest is usually established by law. It varies in different countries and in different parts of our own country. OBS. 1. The legal rate of interest in New England, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, Tennessee, Kentucky, Ohio, Indiana, Illinois, Missouri, and Arkansas, is 6 per cent. In New York, South Carolina, Michigan, Wisconsin, and Iowa, it is 7 per cent. In Georgia, Alabama, Mississippi, and Florida, it is 8 per cent.; in Louisiana, 5 per cent.; in Texas, 10 per cent. On debts in favor of the United States, it is 6 per cent. 2. In Canada and Nova Scotia, the legal rate is 6 per cent.; in England and France, 5 per cent.; in Ireland, 6 per cent. In Italy about the commencement of the 13th century, it varied from 20 to 30 per cent. 236. Any rate of interest higher than the legal rate, is called usury, and the person exacting it is liable to a heavy penalty. QUEST.-233. What is Interest? How is it reckoned? 234. What is the principal? The rate? The amount? Obs. What is meant by the term per annum? 235. How is the rate usually determined? Is it the same everywhere? 236. What is any rate higher than the legal rate called? What is the consequence of exacting usury? Is it safe to take less than legal interest? Obs. When no rate is mentioned, what rate is understood? |