To find the interest when the time given is that between two dates. When the time between the given dates is less than one year, it is customary to compute the interest for the exact number of days between the dates, counting 360 days to the year. Thus : Example 1: Find the interest on $1000 at 4% from May 5 to June 12. WORK Find the exact number of days from May 5 to June 12. When the time between the given dates is more than a year, it is customary to compute the interest for the number of years, months, and days, found by compound subtraction. Thus: Example 2 Find the interest on $1000 at 4% from May 5, 1920, to June 12, 1921. WORK Find the time in years, months, and days by compound subtraction and then proceed as formerly. Find the interest and the amount : TIME [With pencil] Jan. 5, 1918 to Nov. 26, 1918 July 18, 1920 to Sept. 5, 1922 1. Mr. Atkins borrowed $600 from his bank for 90 days at 6% interest. How much interest did he pay? 2. A member of a Building and Loan Association borrowed $500 from the Association on excellent security, promising to repay with interest at the rate of 6%. How much was due at the end of 6 mo.? 3. Mr. Byrnes borrowed $1200 from Mr. Ryan on Mar. 18 at the rate of 6%. He returned it with interest on July 12 of the following year. How much did he return? 4. A bill of $800 should have been paid on June 4, 1920. It was paid Aug. 15, 1921, with interest at 5%. How much interest was paid? 5. Mr. Peterson invested $4000 which yielded him a dividend (interest) of 12% per annum. What was his annual dividend? 6. Mr. Ward borrowed $2000 at the legal rate of interest (6%) and invested it in merchandise that he sold immediately at a profit of 25%. He settled his debt 1 mo. later. What was his net profit? 7. On Aug. 9 a speculator borrowed $5000 at 5% interest to invest in a certain house, which he later sold for $6000. After paying his debt with interest on Oct. 20, what was his net profit? 8. A debt of $2500 was due on July 9, 1920. It was paid on Sept. 4, 1921 with interest at 41%. How much was paid? 9. A man bought some property for $8500, paying $6000 in cash, and promising to pay the rest in 2 yr., with interest at 51%. How much must he pay at the end of 2 yr.? 10. John inherited $2000 from his grandfather, which his father invested in a mortgage bearing 6% interest. What was the annual income (interest) from this investment? 11. A certain bank paid 34% interest on money deposited in it and lent this money to depositors at 6%. How much did it make in 6 mo. on deposits amounting to $20,000? 12. Henry bought a $100 Liberty bond of the first issue (1917), bearing interest at the rate of 34%, payable semiannually. How much interest did he get every 6 mo.? 13. His sister Louise bought a $100 Liberty bond of the third series (1918), bearing interest at the rate of 41%. She de cided to save her interest. How much had she saved at the end of 5 yr.? 14. Anna deposited her money in a savings bank paying 4% per annum, interest payable semiannually. If she had $150 in the bank on Jan. 1 and did not withdraw any, with what interest should the bank credit her on July 1? 15. Mr. Harrison borrowed $800 for business purposes. He paid his debt with interest at 6% 75 days later. How much did he pay? The Six Per Cent Method By the six per cent method, we find the interest on $1, then multiply it by the number of dollars in the principal. Example: What is the interest on $520 at 6% for 1 yr. 8 mo. 18 da.? = = $.103 for 18 da. = 18$.000= $.003 The interest on $1 for 1 yr. 8 mo. 18 da. Remember: = $53.56, Ans. 1. To get the interest at 6%, multiply $.06, $.005, $.000 by the given number of years, months, and days, respectively. Add the results, and multiply by the number of dollars in the principal. 2. To get the interest at any rate, using the 6% method, divide the interest at 6% for the given time by 6, and multiply by the number in the given rate. Thus, in the example on page 159, if the rate were 5% instead of 6%, the interest would be of $53.56 or $44.63%, which, to the nearest cent, equals $44.63. The Sixty-day Method The sixty-day method is used by some business men. It is the 6% method with short cuts. = As 60 days of a year, the interest for 60 days at 6% is 1% or Too of the principal. Divide the given time into periods of 2 months or multiples or fractional parts thereof. Example: What is the interest on $400 for 126 days at 6%? The interest on $400 for WORK 60 days at 6%=$4 = = $8.40, Ans. Apply this method to examples on the previous pages. BUSINESS TRANSACTIONS OF A MANUFACTURER 1. Mr. Benjamin Arnold was a manufacturer of dresses, suits, and cloaks. He sold goods on the following terms: 6/10, 5/30. Last week he sold $8000 worth of dresses at 6/10, and $6000 worth at 5/30. What was the net price paid for these goods? 2. The materials used for a certain style of dress cost him $12.50 per dress, less 10% discount. If his overhead charges (rent, light, etc.) amounted to $1.25 per dress and the labor cost $8.50, what per cent of net profit did he make by selling each dress for $30, less a discount of 5%? |