PROBLEMS UNDER UNITED STATES COURT METHOD. 146. A note for $1642.71 with interest from Feb. 17, 1888, is indorsed as follows: July 6, 1888, $164.42; What is the amount due June 7, 1891? 147. A note for $1500, at 6%, is dated Sept. 6, 1890. Partial payments: Dec. 12, 1890, $45; Dec. 31, 1890, $65.50; What is the amount due Nov. 16, 1891? 148. A four months' note for $540, at 5% interest, is dated July 14. Payments: Aug. 17, $100; What is the amount due at maturity? 149. A note for $10,000, at 6%, is dated Nov. 21, 1886. Indorsements: Apr. 16, 1888, $750; Dec. 22, 1888, $2500; Apr. 4, 1891, $5000. How much is due Dec. 31, 1891? The United States Court Method has been variously modified by some of the state courts, but we need not concern ourselves with these modifications. If one understands the general principle, local usages can be followed without difficulty. PARTIAL PAYMENTS BY THE MERCHANTS' METHOD. By this method, if the account does not run for more than about a year, interest is allowed on the principal for the entire time and on each partial payment from the time it is made until the account is settled. It is more favorable to the debtor than either of the methods already given. $1240 is loaned June 4, 1890, at 6% interest. Payments are made as follows: Sept. 6, 1890, $240; What is the amount due April 10, 1891? $240. in 7 mos. 4 dys. amounts to $248.56 $462.20" 3 "13 $1240 in 10 mos. 6 dys. amounts to $1303.24 Amount due April 10, 1891 = = 831.65 $471.59 If the account runs for much more than a year, interest is calculated on the principal for 1 year, and on each partial payment made during the year, from the time it was made till the end of the year. The balance is taken for a new principal. PROBLEMS UNDER MERCHANTS' METHOD. 150. A demand note for $600, at 6% interest, is dated Sept. 18, 1890. Indorsements: Dec. 12, 1890, $45; Mar. 16, 1891, $240. How much is due Aug. 14, 1891? 151. A note for $4000 at 6% is dated May 3, 1889. Indorsements: When may the sum of these amounts be paid all at once, without loss to either party? We will first assume, as the date for payment, the date on which the first amount becomes due. It is a mere matter of convenience what date is assumed, any date will answer. If payment were made at the time assumed, the debtor would lose the interest on The date required must be enough later than the one assumed, so that the interest on $1837.94, from the date assumed to the date required, will be $8.62. The interest on $1837.94 for 1 month at 6% = $9.19. 86 30= 28 days after the date assumed. = The payment of $1837.94 is due in 1 month 28 days. If we had calculated interest at 5%, instead of $8.62 we would have obtained an amount one fifth less than $8.62, and instead of $9.19, an amount one fifth less than that. The final result would have been the same. Unless interest tables are used, 12% is the rate usually taken. At this rate, the interest on $1 is 1 cent per month, and of a mill per day. As the rate of interest does not affect the result, the problem may be performed without taking any rate into account. It may be done in the following manner: Interest on $100.46 for 2 mos. 15 dys. at 12% = $2.51 Interest on $37.04 for 1 mo. at 12% = $.37. 37) 398 (10 mos. 23 dys. 5.49 $3.98 370 28 30 840 74 100 The assumption of April 17, 1891, as the date on which the full amount of $397.04 was due, involves a loss to the debtor of $5.49 in interest. But by paying $160 on May 17, and $200 on Aug. 14, instead of making these payments on the assumed date, he has gained $9.47 in interest. Striking the interest balance, he has gained $3.98. In order to make up for this gain, the balance of the account must be considered as due before the date assumed. = = $3.98 is the interest on $37.04 for 10 mos. 23 dys. April 17, 1891, less 10 mos. 23 dys. May 25, 1890 equated time for payment of the balance of $37.04. Suppose on June 14, 1891, B had merchandise of A on 2 mos. time, to the amount of $300. The account now stands, |