Interest on Cr. side from July 1...$ 14.283 If Mr. Fox had paid all these bills, amounting to $1600, on the first day of July, he would have lost the interest on them, amounting to $18.605; but he paid only certain amounts, in all $1100, at different dates after July 1, on which the interests from July 1 to the date of their payment amount to $14.283. He would therefore have lost in interest $18.605 - 14.283 $4.322, and should equitably keep the balance of $500 as long after July 1 as it would take for the interest on it to amount to $4.322. $4.322 ÷ $2.50 (the interest of $500 for = = 1 m.) 1.73; that is, Mr. Fox should retain the $500 1.73 m., 1 m. 22 d. July 1, 1878, + 1 m. 22 d. = Aug. 23, 1878, Ans. or 15. What is the equated time for paying the balance of $196 due on the following account? In this case the balance of interest is on the side of the smaller amount. If Mr. Fox had paid all the bills, amounting to $1751, on the first day of January, he would have lost the interest on them, amounting to $27.153. But he paid $ 1555 only, and at dates so long after January 1 that the interest amounts to $28.82. He would therefore, if he had settled on January 1, have gained in interest $28.82 $27.153=$1.677; the balance of the account, $196, would therefore be due as long before January 1 as it would take for the interest on it to amount to $1.677, viz. 1 m. 21 d. Jan. 1, 1879, — 1 m. 21 d. Nov. 11, 1878, Ans. = NOTE. It is manifestly impossible to settle an account before the date of the transactions. The advantage of finding an equated date is, that we thus find a certain date on which, if the account could have been settled, there would have been no loss to either party, and from which interest can be computed to any agreed date of settlement. 384. Hence, to equate accounts when there are both debits and credits, Rule. Compute the interest of each item of the account from the first day of the first month in which any transaction matures, to its maturity. Find the sum of the interests on the debit items, also the sum on the credit items, and subtract the less sum from the greater; divide this difference by the interest on the balance of the account for one month, and the quotient will be the time in months from the first day of the first month named above to the equated time of settlement. Count the time forward when the greater interest is on the greater side of the account, and backward when the greater interest is on the smaller side. 16. Find the equated time for paying the balance of the following account. 17. Find the equated time for paying the balance of the fol NOTE. Copy off the account, dating each item at its maturity. 18. Find the equated time for paying the balance of the fol 19. The following account was settled by a 3 months' note. When should the note be dated to fall due (with grace) at the equated time of payment? 20. The following items are all on 3 months' credit. When should a note, to settle the balance, due in 3 months (with grace), be dated? BONDS. 385. Governments and corporations often borrow money, and as evidence of their indebtedness issue certificates payable at or before some stated time, with interest payable annually, semi-annually, or quarterly. These interest-bearing notes, or government securities, are called bonds. 386. Coupons are certificates of interest attached to a bond, which as they fall due are cut off and given up to the payer on receipt of the interest. 387. Bonds are usually named according to their yearly rate of interest and date of maturity; as U. S. 4's 1907, which means United States Bonds bearing 4% interest annually and payable in 1907; U. S. 41's '91, which means United States Bonds bearing 41% interest annually and payable in 1891; Boston and Albany 6's '95, Union Pacific 6's. The interest on bonds is generally payable semiannually. But on most of the U. S. bonds the interest is payable quarterly. 388. Bonds, like stocks, are regularly bought and sold at the Brokers' Boards and at auction. The sum to be paid to the holder of a bond on its maturity is the face value, or 100 %, but bonds are generally bought and sold previous to maturity, at a premium, or discount, which depends upon the value of money, the time to elapse before the principal is due, the credit of the maker of the bond, etc. 389. The rules of percentage already given apply to bonds and exchange. |