Example 2: A note dated Sept. 12 was due in 3 mo. Find the day of maturity. WORK The third month after September is December. Therefore Dec. 12 was the day of maturity. (Since September is the ninth month, 3 mo. after that was the twelfth month, or December.) Be sure to know the numerical order of the months. Copy, and enter the day of maturity of each note in each column: DATE 5. Oct. 24 6. Feb. 15 7. Sept. 20 8. Aug. 9 DUE IN 2 MO. DUE IN 60 DA. DUE IN 90 DA. DUE IN 3 Mo. 9. How much was due on the day of maturity on a note of $600, payable in 120 days with interest at 5%? 10. I had a demand note payable with interest at 4%. Aug. 5, 1921? dated June 4, 1921 for $350, How much was due on it on 11. A note of $1200 due in 1 yr. 6 mo. with interest at 6% was paid when due. How much was paid? BANK DISCOUNT The holder of a valid check may obtain its face value on the very day it is made, while the holder of a note cannot obtain its face value until the day of maturity. If the holder of a check desires to have it cashed, he indorses it and presents it to a bank or to a person who is satisfied that the check is valid. The amount in full is then paid to him. If the holder of a note does not wish to wait for payment until the day of maturity, he presents the note to a bank, properly indorsed and secured, and the bank discounts it; that is, the bank pays him the amount due on the note, less the interest on this sum for the time remaining before the day of maturity. This interest, collected in advance by the bank, is called bank discount. The amount of the note due at maturity, less the bank discount, is called the proceeds. When the note falls due, the maker must pay the bank the amount due. If the note is an interest-bearing note, the amount due is the face of the note plus the interest for the time specified in the note. If it is a non-interest-bearing note, the amount due is the face of the note. The day on which a note is discounted is called the day of discount. Banks always charge discount or interest for the exact number of days from the day of discount to the day of maturity. This time is called the term of discount. In computing bank discount, banks reckon 360 days to the year. (In some states the law allows three days of grace beyond the day of maturity for the payment of notes. The law does not allow days of grace in New York and they are not to be considered in this book.) Find the day of maturity and the term of discount: Example 1: Mr. Beaver had a note of $1000 dated Mar. 9, due in 60 da., which he discounted at his bank on April 2 at 6%. How much did he receive for it? 36 6 :X: 360 100 1 $1000-$6, bank discount; $1000-$6-$994, proceeds, Ans. Example 2: How much would Mr. Beaver have received for the note if he had had it discounted on the day it was made out? WORK Term of discount = 60 da. -×$1000= $10, bank discount; $1000-$10=$990, proceeds, 6Ø в X 360 100 Ans. Find the day of maturity and the term of discount of the following notes : DATE Find the bank discount and the proceeds: 25. Of a note for $600, dated Mar. 9, due in 2 mo., and discounted at 6% on the day the note was made. 26. Of a note for $800, dated Sept. 15, due in 90 da., and discounted at 6% at once. Find the bank discount and the proceeds of the following |