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27. Owned 53 shares of the Long Island Railroad stock, which were sold at auction at 13 percent. advance : 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 ?

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.

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. 227 ;) the latter is reckoned at a certain per cent. for one year ; consequently, for longer or shorter periods than one year, like proportions of the percentage for one year are taken. The term per annum signifies for a year.

234. The money lent, or that for which interest is paid, 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, if I borrow $100 for 1 year,

and

pay

5 per cent. for the use of it, at the end of the

year

I must pay the lender the original sum $100 I borrowed and $5 interest, making $105. The principal in this case, is

the interest $5; the rate 5 per cent. ; and the amount $105.

agree to

$100;

235. The rate of interest is usually established by law, which is therefore called legal interest. It varies in

QUEST.-233. What is Interest? How is it reckoned? Obs. What is meant by the term per annum? 234. What is meant by the principal ? The rate ? The amount ? 235. How is the rate usually determined ? Is it the same everywhere?

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. ; and in Louisiana but 5 per cent.

On debts and judgments in favor of the United States, interest is computed at 6 per cent.

2. In England and France the legal rate is 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

Any rate less than the legal rate may be taken, if the parties concerned so agree.

Obs. 1. When no rate is mentioned, the rate established by the laws of the State in which the transaction takes place, is always understood to be the one intended by the parties.

2. The term per annum is seldom expressed in connexion with the rate per cent., but it is always understood ; for the rate is the per cent. paid per annum. (Art. 234.)

Ex. 1. What is the interest of $15 for 1 year, at 4 per cent. ?

Suggestion. 4 per cent. is too ; that is, $4 for $100, 4 cents for 100 cents, &c. (Art. 223.) Now as the interest of $1 (100 cents) for a year,.is 4 cents, the interest of $15 for the same time, is 15 times as much. And 15 times 4 cents are 60 cents. Ans. 60 cents.

QUEST.-Obs. What is the legal rate of interest in New Engand, New Jersey, &c.? What is the legal rate of interest in New York, South Carolina, &c. ? In Georgia, Alabama, &c. ? On debts due the United States ?. What is the legal rate of interest in England and France ? Ireland ? 236. What is a higher than a legal rate called? What is the consequence of usury? Is it safe to take less than legal interest ? Obs, When no rate is mentioned, what rate is understood ?

Operation. We multiply the principal by the given $15 Prin. rate per cent. expressed in decimals, as in .04 Rate. percentage ; (Art. 225;) and point off as

many decimals in the product as there $.60 Int.

are decimal places in both factors. 2. What is the interest of $45 for 1 year, at 3 per cent. ? $1.35. Ans.

3. What is the interest of $32.125 for 1 year, at 45

per cent. ?

Operation.

45 per cent. expressed in deci$32.125 Prin. mals is .045. (Art. 223.) Multi.045 Rate. ply, &c. as above, and point off 6

decimals in the product. (Art. 191.) 160625 128500

The fractions of a mill may be omit

ted in the answer. Hence, $1.445625 Ans.

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237. To find the interest of any sum, at any given rate, for 1 year.

Multiply the principal by the given rate per cent. expressed in decimals, and point of the product as in multiplication of decimal fractions. (Art. 191.)

The amount is found by adding the principal and interest together. (Art. 234.)

Obs. 1. In adding the principal and interest, care must be taken to add dollars to dollars, cents to cents, &c. (Art. 211.)

2. When the rate per cent. is less than 10, a cipher must always be prefixed to the figure denoting it. (Art. 223. Obs. 1.) It is highly important that the principal and the rate should both be written correctly, in order to prevent mistakes in pointing off the product.

4. What is the interest of $75.21 for 1 year, at 6 per cent. ? $4.5126. Ans.

5. What is the interest of $100 for 1 year, at 5 per cent. ? at 6 per cent. ? at 4 per cent? at 7 per cent. ?

Quest.-237. How do you compute interest for 1 year? How find the amount? Obs. What precaution is necessary in adding the principal and interest together? When the rate is less than 10 per cent., how is it written?

per cent. ?

6. What is the interest of $35.31 for 1 year, at 6 per cent. ?

7. What is the interest of $50.10 for 1 year, at 7 per cent. ?

8. What is the interest of $63 for 1 year, at 5) per cent. ?

9. What is the interest of $136.75 for 1 year, at 43 per cent. ?

10. What is the interest of $260.61 for 1 year, at 6 per cent. ? What is the amount ? Ans. $15.636 int. $276.246 amount. (Art. 237. Obs. 2.)

11. What is the interest of $140.25 for 1 year, at 7 per cent. ? The amount ? 12. What is the interest of $163.40 for one year, at 8

The amount ? 13. What is the interest of $400 for 1 year, at 6 per cent. ? The amount ?

14. What is the amount of $500 for 1 year, at 7 per cent. ?

15. What is the amount of $1000 for 1 year, at 8 per cent. ?

16. What is the interest of $100 for 3 years, at 6 per cent. per annum ? Operation.

The interest for 3 years is $100 Prin. plainly 3 times as much as for 1 .06 Rate.

year. We therefore first find the

interest for 1 year as above, $6.00 Int. 1 y.

which is $6; then multiplying 3 No. of y. $18.00 Int. for 3 y. 3 years. Hence,

this by 3, gives the interest for

238. To compute the interest of any sum for a given number of years.

First find the interest of the given sum for 1 year, at the given rate ; (Art. 237 ;) then multiply the interest of 1 year by the given number of years.

QUEST.--238. How is interest computed for any number of years ?

17. At 5 per cent. per annum, what is the interest of $45 for 4 years

? Ans. $9. 18. At 6 per cent., what is the interest of $200 for 5 years ? What the amount ?

19. At 7 per cent., what is the interest of $250 for 10 years ? What the amount?

20. At 8 per cent., what is the interest of $340.50 for 3 years s ? What the amount?

21. At 6 per cent. per annum, what is the interest of $100 for 1 month ?

Operation.

1 month is ia of 12 months $100 Prin.

or a year, therefore the interest .06 Rate.

for 1 month will be is as much 12)6.00 Int. for 1 y.

as the interest for 1 year. Now

the interest of $100 for 1 year $.50 Int. for 1 m.

is $6, and la of $6 is 50 cts. In like manner any number of months may be considered a fractional part of a year, and the interest for them may be computed in the same way. Hence,

239. To compute the interest of any sum for a given number of months.

First find the interest for 1 year as above; then take such a fractional part of 1 year's interest, as is denoted by the given number of months.

Thus for 1 month take ia of 1 year's interest ; for 2 months, or ; for 3 months, i, or $; for 4 months, is or }; for 6 months, in or ; &c.

22. At 5 per cent., what is the interest of $600 for 6 months ? Ans. $15.

23. At 7 per cent., what is the interest of $250 for 4 months ?

Quest.–239. How is interest computed for months ? For 2 months, what part would you take? For 3 months ? 4 months ? 5 months ? 6 months? 7 months ? 8 months ? 9 months ? 10 months ? 11 months ?

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