4. What were the proceeds of a note for $300 without interest, due Jan. 7, 1907, and discounted Nov. 15, 1906, the discount rate being 5%?

5. The following note was discounted at the rate of 41% per annum on the 21st day of January, 1905. What were the

proceeds? $9600

NEW YORK, December 7, 1904.

Ninety days after date I promise to pay to the order of the New York National Exchange Bank nine thousand six hundred dollars.

Value received.

CHARLES H. REDMOND.

6. What are the proceeds of a six-months note for $800, without interest, dated May 7, 1903, and discounted Oct. 15, 1903, at the rate of 6% per annum ?

7. A man in Seattle accepted a 30-day note for $975, without interest, in payment for furniture. Nine days later he had the note discounted at the rate of 8% per annum. What did he receive for it?

8. Silas Brown sold a vacant lot on the 15th day of April, 1906, to James Otis, taking in part payment a six-months note for $900 without interest, signed by Francis Fernald, dated Dec. 1, 1905, and payable to Mr. Otis at the Marine Bank. Mr. Otis indorsed the note to Mr. Brown's order and Mr. Brown immediately indorsed it in blank and had it discounted. The discount rate was 7%.

a. Write the note and make all the indorsements.

b. How much did Mr. Brown receive for the note?

9. A 90-day note for $1000 with interest at 6% was discounted at 6% on the day of date. What were the proceeds?

10. On the first day of March, 1907, Edward F. Jones borrowed $800 from John Ethridge, giving his note for one

year with interest at 8%, payable at the Corn Exchange Bank. On the first day of January, 1908, Mr. Ethridge had the note discounted at 6% per annum. How much did he receive for it?

11. A 90-day note for $690, bearing interest at 6%, was discounted at the same rate 60 days after date. What were the proceeds?

12. A merchant sold at 25% profit a bill of goods that cost him $150 cash, taking in payment a 60-day note without interest, which he had discounted immediately at 7% per annum. What was his net profit on the bill of goods?

13. A farmer received $297 as the proceeds of a note, without interest, due in 60 days, discounted at 6% per annum. What was the face of the note?

Solution

(180 × 36% = .01, or 1%.)

Discount for 60 da. = 1% of face.

Proceeds for 60 da. =

99% of face.

Statement of Relation: 99% of face = $297.

14. I borrowed $591 from a bank, giving my note for 90 da. without interest, the rate of discount being 6%. What was the face of the note?

15. Edward H. Flint gave William G. Barrows his note, without interest, payable 30 days after date at the Third National Bank. Mr. Barrows indorsed the note and deposited it on his account on the day of date, receiving credit for $477.20, the rate of discount being 7%. Write the note and indorse it properly.

16. Robert M. Smith borrowed $715.26 from the Security National Bank, giving his note for 100 days, without interest,

which was discounted at 7%, and indorsed by Fred Howard. Write the note and indorse it.

17. A farmer gave in payment for farm machinery a bank note for $600, due six months from date, without interest, money being worth 8%. That was equivalent to how much in cash?

18. Mr. Walsh owed $700 at the bank. When it became due, he obtained 30 days' extension of time by paying the bank discount for that time at the rate of 7%. How much did he pay to secure the extension?

19. By paying $3.50, a debtor obtained a 15 days' extension of time on a debt at a bank, which made a discount rate of 6%. How much did he owe?

Statement of Relation: Face × 180 × 35% = $3.50.

20. What are the proceeds of a six-months note for $400, bearing interest at 5%, discounted four months after date at 6%?

21. What is the face of a non-interest-bearing note payable 90 days after date which will bring $550 if discounted 70 days after date at 6% ?

22. A non-interest-bearing note, dated May 7, 1904, due in three months, was discounted at 6%, June 8, 1904, yielding $574.20. What was its face?

23. Given the amount $896.50, term of discount 45 days, rate of discount 5%. Find the proceeds.

24. Given the proceeds $1541.99, rate of discount 7%, time 33 days. Find the face.

25. Write a 60-day bank note without interest, which will yield enough, if discounted at 6% on the day of date, to buy 25 acres of land at $29.70 per acre.

SIR:

377. PROTESTING NOTES, CHECKS, AND DRAFTS

SYRACUSE, N. Y. Jan. 8, 1908

PLEASE TO TAKE NOTICE THAT A note MADE BY Timothy L. Hughes DATED Oct. 10, 1907, FOR $500 AND INDORSED BY YOU, WAS THIS

DAY PROTESTED FOR NON-PAYMENT, AND THAT THE HOLDERS LOOK TO YOU FOR THE PAYMENT THEREOF, PAYMENT HAVING BEEN DEMANDED AND REFUSED.

YOURS RESPECTFULLY,

F. L. BARNES,

NOTARY PUBLIC.

TO Charles Gibbs

If a bank note, check, or draft (see page 231) is not paid at the time specified, a notice similar to the above is sent to each of the indorsers. This is called a notice of protest, and sending it is called protesting the note, check, or draft.

If notice of protest is not sent within a reasonable time after default in payment has been made, the indorsers are released from liability for payment. Banks usually protest a note after banking hours on the day of maturity. This notice enables an indorser to protect himself and avoid needless expense. It is customary to send a notice of protest to the maker, also, though he cannot avoid liability for payment if the notice is not sent. The notice of protest is always signed by a notary public, who is generally an officer or employee of the bank, also.

Consult your dictionary to find the meaning of notary public. Most notaries public are not connected with banks.

378. Oral

1. Can you define a notice of protest?

2. Why is a note protested, when unpaid at the time of maturity?

3. The notice given above is the one that would have been sent to Charles Gibbs, if the note on page 211 had not been paid when due. To what other persons would the notice have been sent?

4. What is a notary public?

5. Name the men who are responsible for the payment of the note mentioned above, if it is properly protested when due and unpaid?

6. Who is responsible for its payment, if not protested when due and unpaid?

7. Who is always liable for the payment of a note?

379. Written

1. A bank note for $450, dated April 1, 1903, payable 60 days after date, without interest, was properly protested when due, and was finally paid by one of the indorsers on the 29th of August, 1903. The indorser was obliged to pay a fee of $1.25 for protesting the note, together with interest at 7% on the note from the day of maturity. How much did he pay?

2. If the note on page 211 was paid by the maker Jan. 18, 1908, including $1.25 for protesting, how much did he pay, the legal rate of interest in New York State being 6%?

3. A bank note for $1000, without interest, became due and was protested. Six days later, the maker took up the note by giving a new note for the same sum for 30 days, with a new indorser, and paying the bank discount on the new note at 6%, interest on the old note from the day of maturity at. 6%, and the charge for protesting, which was $1.75. How much did he pay?

4. The maker of a bank note, without interest, paid the note 30 days after maturity, with interest at 6% from the day of