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132. What is the amount of $60 at 7% per annum for 12 years at compound interest?

133. What is the amount of $550.50 at 8 % compound interest for 18 years?

134. What is the compound interest of $95 for 20 years at 8% ?

135. What is the interest of $400 for 7 yr. 6 m. at 4 % for each 6 months, compounding the interest semi-annually?

370. QUESTIONS.

326. What is interest? 327. The principal? 328. The amount? 329. The rate? 330. What is the base? The percentage? 331. What is a legal rate? 334. Rule for finding the interest on any sum for any given time? For finding the amount? 336. In computing interest how many days are counted in a year? 338, 344. Give the Rule for computing interest at 6% for any given time. 339. Give the Rule for finding the interest at any other rate than 6%. 341. How can the interest of $1 at 6% be found for any time? 346. How much too great is the interest computed by previous methods? Why? 347. Give the Rule for finding exact interest for any number of days. 348. How many and what are the elements in interest? How many must be given that the rest may be found? 349. Principal, interest, time, to find the rate? 350. Amount, time, rate, to find the principal? 351. What is meant by present worth? 352. In an example in present worth, what is given and what is to be found? What is the discount? 353. How is the discount found? 354. Principal, interest, rate, to find the time? 355. Interest, time, rate, to find the principal? 356. What are partial payments? 357. What is a note? 358. The face of a note? 359. The promisor? 360. The promisee? 361. The indorser? 362. Indorsements? 363. Give the United States Rule for finding the sum due on a note on which there are indorsements. 364. When settlement is made within a year after interest commences, what is the Rule commonly used? 365. What is compound interest? 367. Give the Rule for finding the amount of any sum at compound interest. 368. Rule for finding the interest. Is simple interest at 3% half as much as at 6%? Is compound? Explain. 369. Explain the table and how to use it.

$275.55.

BANK DISCOUNT.

Boston, Aug. 26, 1878.

Three months after date I promise to pay to the order of George C. Davis two hundred seventy-five

55

and dollars.

100

Value received.

William M. Carroll.

371. If the note above is discounted at a bank on the day of its date, Aug. 26, 1878, the bank pays George C. Davis (or his order) $275.55 less the interest of $275.55 for 3 months and 3 days, that is, $275.55 — $4.27, or $ 271.28.

372. Bank Discount is, therefore, only simple interest paid when the money is loaned. $4.27 is the bank discount on the note above.

373. The Avails, or Proceeds, of a note is the amount received by the borrower, and is equal to the face of the note less the interest. In the note above the avails are $271.28.

374 In most of the States a note is not legally due until three days after the time which the note specifies for its payment. These three days are called days of grace. A note matures upon the last day of grace. Thus, the note above is nominally due Nov. 26, 1878, but legally Nov. 29, 1878. This is expressed by writing both dates thus, Nov. 26/29, 1878. Nov. 29 is the date of maturity of the note.

375. Hence, to find the bank discount and the avails of a note, payable at a specified future time, without interest,

Rule.

Find the interest on the face of the note, at the given rate, from the time of discounting to maturity, and the result will be the discount. Subtract the discount from the face of the note, and the remainder will be the avails.

NOTE 1. When a note becomes due on Sunday or a legal holiday, it is legally payable on the preceding day.

NOTE 2. A note made payable in a certain number of days is not due until that number of days and grace expire; thus a thirty days' note, dated Jan. 31, becomes due March 5 (or, in leap year, March 4), but a note made payable in a certain number of months, nominally matures on the same day of the month that it is dated, if there are so many days in the month when it matures; or, if there are not so many days in the month, it matures on the last day of the month; thus, a one month note, dated on the 28th of February, nominally matures March 28, and legally matures March 31; but a one month note, dated on Jan. 28 (except iu leap year), or on Jan. 29, Jan. 30, or Jan. 31, nominally matures Feb. 28, and legally March 3.

NOTE 3. When the time of discount is less than 2 months many banks count the exact days from discount to maturity. Thus, if a note is discounted Oct. 12, and matures Dec. 5, the time is 1 m. 23 d., but the bank computes interest for 54 days.

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1. What is the bank discount on a 90 days' note for $368? What are the avails?

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2. I have a 6 months' note for $768, dated May 12; what

will be the avails if I get it discounted Sept. 3?

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3. What will be the bank discount and what the avails of a

4 months' note for $8646?

4. Of a 90 days' note for $ 1842 at 7 % ?

5. Of a 6 months' note for $ 489 at 5 % ?

6. A 4 months' note for $629, dated Feb. 27, was discounted Apr. 12; what were the avails ? ·

NOTE 4. When a note bearing interest is discounted before its maturity, the amount of the note at maturity, rather than its face, is the base for discounting.

7. What are the proceeds of a note for $10000, payable in 6 months and bearing interest, if discounted 2 months before its maturity?

Solution. The amount of $10000 for 6 m. 3 d. is $10305, and the interest of $10305 for 2 m. is $103.05, which taken from $10305 leaves $10201.95, Ans.

8. What are the avails of a note for $6844, payable in 4 months and bearing interest, if discounted 1 month after date?

377. To find the sum for which a note must be written that the avails or proceeds may be a specified sum.

9. For what sum must a 45 days' note be written that the avails may be $ 240?

OPERATION.

$ 1.000 Interest of $1 for 48 days... 0.008 Avails of $1 .$0.992

240

0.992 $241.94, Ans.

The avails of $1 for 45 days and grace are $0.992, and therefore the face of the note must be as many dollars as $0.992 is contained times in $240, or $241.94. Hence,

Rule.

Divide the required proceeds by the proceeds of $1 for the given rate and time, and the quotient will be the face of the required note.

10. For what sum must a 3 months' note be given, that the proceeds may be $ 300 ?

11. A farmer sold produce for which he received a 60 days' note, which he immediately had discounted at the bank. The avails of the note were $593.70; what was its face?

12. A merchant wishes to borrow $1200 at a bank, for 90 days; what shall be the face of the note, the rate of interest being 7 % ?

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13. What is the bank discount of a note of $765.84 due in 3 months at 8% ?

$873.45.

BROOKLYN, N. Y., Sept. 17, 1878.

Four months after date I promise to pay John Brown, or order, eight hundred seventy-three dollars and forty-five cents.

Value received.

CHARLES STEVENS.

14. Find the proceeds of the above note if discounted on its date at a bank at 6 %.

15. Find the avails if discounted at a bank Oct. 29, 1878, at

7%.

16. Find the avails if discounted Nov. 26, 1878, at 7%.

Find the proceeds of:

17. A 4 months' note for $315.70, dated June 9, discounted July 25, at 4 %.

18. A 90 days' note for $1125, dated Aug. 15, discounted Sept. 3, at 5 %.

19. A 3 months' note for $768.50, dated Dec. 13, 1878, discounted Jan. 22, 1879, at 51 %%

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