APPLICATIONS. Calculate the interest on the following notes. $127,50 New York, January 1st, 1838. 1. For value received I promise to pay on the 10th day of June next, to Wm. Johnson or order, the sum of one hundred and twenty-seven dollars and fifty cents with interest from date, at 7 per cent. John Liberal. Ans. $131,46+. $306 New York, January 1st, 1833. 2. For value received I promise to pay on the 4th of July, 1835, to Wm. Johnson or order, three hundred and six dollars with interest at 6 per cent from the 1st of March, 1833. John Liberal. Ans. $349,04+. $1040 Hartford, July 3rd, 1837. 3. Six months after date, I promise to pay to C. Jones or order, one thousand and forty dollars with interest from the 1st of January last, at 7 per cent. Joseph Springs. Ans. $1113,40+. $ 160. We shall now give the rule established in New York, (See Johnson's Chancery Reports, Vol. I. page 17,) for computing the interest on a bond or note, when partial payments have been made. The same rule is also adopted in Massachusetts, and in most of the other states. RULE. J. Compute the interest on the principal to the time of the first payment, and if the payment exceed this interest, add the interest to the principal and from the sum subtract the payment: the remainder forms a new principal. II. But if the payment is less than the interest, take no notice of it until other payments are made, which in all, shall exceed the interest computed to the time of the last payment : then add the interest, so computed, to the principal, and from the sum subtract the sum of the payments : the remainder will form a new principal on which interest is to be computed as before. EXAMPLES. 22 $349,99 8. May 1st, 1826. 1. For value received I promise to pay James Wilson or order, three hundred and forty-nine dollars ninety-nine cents and eight mills with interest, at 6 per cent. James Paywell. On this note were endorsed the following payments: Dec. 25th, 1826 Received $49,998 $ 4,998 $15,000 June 14th, 1829 $99,999 What was due April 15th, 1830 ? Principal on int. from May 1st, 1826, $349,998 Interest to Dec. 25th, 1826, time of first payment, 7 months 24 days. 13,649+ Amount $363,647 Payment Dec. 25th, exceeding interest then due $ 49,998 Remainder for a new principal $313,649 Interest of $313,649 from Dec. 25th, 1826, to June 14th, 1829, 2 years 5 months $ 46,472+ Amount $360,121 . 19 days Payment, July 10th, 1827, less { $ 4,998 than interest then due Payment, Sept. 1st, 1828 Their sum less than interest then due } $20,006 $120,005 Payment, June 14th, 1829 99,999 1829 Total due, April 15th, 1830 . $240,116 12,045 $252,161+ $3469,32. 2. For value received, I promise to pay William Jenks, or order, three thousand four hundred and sixty-nine dollars and thirty-two cents, with interest from date, at 6 per cent. Feb. 6th, 1825. Bill SPENDTHRIFT. On this note were endorsed the following payments : May 16th, 1828, received $545,76. Feb. 1st, 1831, received $2074,72. Ans. $860,55+. 3. A's note of $635,84 was dated Sept. 5th, 1817, on which were endorsed the following payments, viz : Nov. 13th, 1819, $416,08; May 10th, 1820, $152: what was due March 1st, 1821, the interest being 6 per cent? Ans. $168,01 +. COMPOUND INTEREST. $ 161. Compound Interest is when the interest on a sum of money becoming due, and not being paid, is added to the principal, and the interest then calculated on this amount, as on a new principal. For example, suppose I were to borrow of Mr. Wilson $200 for one year, at 6 per cent, and at the end of the year pay him neither the interest nor principal. Now if Mr. Wilson should add the interest, $12, to the principal, $200, making $212, and charge me with interest on this sum till I paid him, this would be Compound Interest, because it is interest upon interest. RULE. Calculate the interest to the time at which it becomes due : then add it to the principal and calculate the interest on the amount as on a new principal : add the interest again to the principal and calculate the interest as before: do the same for all the times at which payments of inte, est become due: from the last result subtract the principal, and the remainder will be the compound interest. EXAMPLES. 1. What will be the compound interest, at 7 per cent, of $3750 for 4 years, the interest being added yearly? $3750,00 principal for 1st year. $3750x7-100= 262,50 interest for 1st year. 4012,50 principal for 2nd $4012,50x74-100= 280,87 +interest for 2nd 4293,37+principal - 3rd $4293,37x7-100= 300,53+interest 3rd 4593,90+principal 4th $4593,90X7-100= 321,57 +interest 4th 4915,47 +amount at 4 years. 1st principal 3750,00 amount of interest. $1165,47+ 2. If the interest be computed annually, what will be the interest on $100 for three years, at 6 per cent? Ans. $19,101+. 3. What will be the compound interest on $295,37, at 6 per cent, for 2 years, the interest being added annually? Ans. $36,50+. 4. What will be the compound interest on $500 for one year, at 8 per cent, the interest being computed quarterly? Ans. $41,21 +. Q. What is Compound Interest ? Give the Rule for computing Compound Interest i COMMISSION AND BROKERAGE. $ 162. Commission is an allowance made to a factor or commission merchant for buying and selling. Brokerage is an allowance made to dealers in money or stocks. The allowance made is generally a certain per cent, or rate per hundred, on the moneys paid out or received, and the amount may be determined by the rules of simple interest. EXAMPLES 1. What is the commission on $4396 at 6 per cent? We here find the com OPBRATION. $4396 mission, as in simple in 6 terest, by multiplying by the rate per cent and divi *263,76 ding by 100. Ans. $263,76. 2. A factor sells 60 bales of cotton at $425 per bale, and is to receive 21 per cent commission: how much must he pay over to his principal ? Ans. $24862,50. 3. A sent to B, a broker, $3825 to be invested in stock: B is to receive 2 per cent on the amount paid for the stock: what was the value of the stock purchased ? OPERATION. 100 As B is to receive 2 per cent, it follows that $102 102 : 100 :: 3825 of A's money will purchase 100 $100 of stock: hence100+ 102)382500(3750 the commission, is to 100, 306 714 20 PROOF. $3750 Commission on $3750, at 2 per cent= 75 Total Sum . . $3825 4. A factor receives $708,75, and is directed to purchase iron at $45 per ton: he is to receive 5 per cent on the money paid: how much iron can he purchase? Ans. 15tons. 5. Messrs. P. W and K buy 200 shares of United States stock for Mr. A. They pay $197 per share, and |