COMPOUND INTEREST.

1. Q. What is Compound Interest?

A. That which arises both from the principal and interest; that is, when the interest on money becomes due, and not paid, it is added to the principal, and interest is calculated on this amount as on the principal before.

2. Q. What is the rule?

A. Find the simple interest of the given sum for one year, and add it to the principal, and then find the interest for that amount for the next year, and so on for the number of years required. Subtract the principal from the last amount, and the remainder will be the compound interest.

EXAMPLES.

1. What is the interest and amount of D325 for 3 yrs at 6per cent. per annum, Compound Int. ?

2. What will D1600 amount to in 5yrs. at 6 per cent.

and 5 per cent. per an.?

Ans. 2141,16 at 6 per ct.

D2012,05 at 5 per ct.

132

COMMISSION AND BROKERAGE, &c.

COMMISSION AND BROKERAGE.

1. Q. What is Commission and Brokerage? A. Compensation to Factors and Brokers for their respective services.

2. Q. What is the method of operation?

A. The same as in Simple interest.

EXAMPLES.

1. What is the commission on D596,184 at 6 per

596,184
6

Ans. D35,771/04

2. What is the commission on D1258 at 5 per ct.?

ct.?

Ans. D62,90. 3. What is the commission on D2176,50 at 21 per ct.? Ans. D54,412.

INSURANCE.

1. Q. What is Insurance?

A. It is an exemption from hazard, by paying, or otherwise securing a certain sum, on condition of being indemnified for loss or damage.

2. Q. What do you understand by a Policy?

A. It is the name given to the instrument, by which the contract of indemnity is effected between the insurer and insured.

3. Q. What is Average loss?

A. It is 5 per cent. ; that is, if the insured suffer any loss or damage not exceeding 5 per cent. he bears it himself and the insurers are free.

4. Q. What is the method of operation?

1. What is the premium of insuring D1650 at 7 per ct.

Ans. D115,50. 3. What is the premium on D375, at 71 per cent?

4. What is the premium on a ship at D4844 at 31 per cent?

Ans. D28,125. and cargo, valued Ans. D169,54.

DISCOUNT.

1. Q. What is Discount?

A. It is the abating of so much money to be received before it is due, as that money, if put at interest, would gain at the same time and at the same

rate.

2. Q. What is the rule?

A. As the amount of 100 dollars, for the given time, is to 100, so is the given sum to the present worth, and the difference between the present worth and the given sum is the discount.

EXAMPLES.

1. What is the discount of D2119,50 due 2 yrs. hence

at 51 per cent?

D cts D

[present worth.

1)100

51

500

50

5,50

2

Ans. D210,041 Discount.

2119,50

1909,459

11,00

100

D111 amount of D100 for 2 years.

2. What is the discount of D350 payable in 6 months at 6 per cent. per annum? Ans. D10,195. 3 Bought goods for D250, ready money, and sold them for D300 payable 9 months hence. What is the present worth of the debt due me; the discount, and what will be my gain, discounting at 6 per ct.?

Ans. present worth D287,081

134

EQUATION OF PAYMENTS-BARTER.

EQUATION OF PAYMENTS.

1. Q. What is Equation of Payments?

A. The design of this Rule is to find a mean time for the payment of several sums due at different times. 2. Q. What is the rule?

A. Multiply each sum by its time, and divide the sum of the products by the whole debt; the quotient is accounted the mean time.

EXAMPLES.

1. A owes B D380 to be paid as follows, viz. D100 in 6 mo. D120 in 7 mo. and D160 in 10 mo. What is the equated time for the payment of the whole? 100X 6= 600

2. The sum of 164,166 is to be paid, in 6 months,

in 8 months and in 12 months.

What is the mean

Ans. 73.

time for the payment of the whole?

BARTER.

1. Q. What is Barter?

A. It is the exchanging of one commodity for another, and teaches merchants so to proportion their quantities, that neither shall sustain loss.

CASE 1st.

2. Q. When a given quantity of one commodity is bartered for some other commodity, how is the quantity that will be required of this last commodity found?

A. Find the value of the commodity of which the quantity is given, then find how much of the other commodity at the rate proposed may be had for that

sum.

EXAMPLES.

1. How much tea at D1,53 per lb. must be given in barter for 156 gallons of wine, at D2,04 per gal.?

2. How much coffee, at 23 cts. per lb. must be given for 855lb. tea, at D1,75, Ans. 6505lb 6oz 15drs.

CASE 2d.

1. Q. If the quantity of both commodities be given, and it be required to know how much of some other commodity, or how much money must be given for the inequality, what is the method of procedure?

A. Find the separate value of the two given commodities, subtract the less from the greater, and the remainder will be the balance, or value of the other commodity.

EXAMPLES.

1. A and B barter; A has 150 bu. of wheat, at D1,25 per bu. for which B gives 65 bu. Rye at 621 cts. per bu. and the balance in corn at 37 cts. per bu. What quantity of corn must A receive? Ans.3913bu 3. A has 30 cwt. of cheese at D3,92 per cwt. this he barters with B for 9 pieces of broadcloth at D12,50 per peice, the balance to be paid in money. Which must receive money, and how much?

Ans. A must receive D5,10.

CASE 3d.

1. Q. If one commodity be rated above its ready money price, how do you proceed to find the bartering price of the other commodity?