446. The Quantities considered are: 1. The Amount Invested; 2. The Rate of Dividend or Interest; 3. The Income; 4. The Market Value of $100, or of one share; 5. The Rate of Income. CASE I. 447. Given, the amount of an investment, the market value, and the rate of dividend or interest, to find the income. 1. If I invest $5100 in 7% bonds at 85, what will be my annual income from them? SOLUTION. Since for 85 cents you can buy $1 worth of stock, for $5100 you can buy as many dollars worth of stock as $.85 is contained times in $5100, or $6000. The annual income on this is $6000×.07 which equals $420. OPERATION. $5100.85 $6000 $6000X.07 $420 Rule.-I. Divide the amount invested by the market value, to find the par value. II. Multiply the par value by the rate to find the income. WRITTEN EXERCISES, 2. What annual income would I receive from $16050 invested in U. S. Pacific R. R. 6's at 107 ? Ans. $900. 3. If I invest $5631.25 in 6% bonds at 112§, what is my annual income from this investment ? Ans. $300 4. I invested $5280 in United Companies of New Jersey, stock costing me 132, dividend 10%; what was my annual income from this investment? Ans. $400. 5. Miss Brown has invested $8475 in 5% railroad bonds at 113, interest payable semi-annually; what will be her semiannual income from this investment? Ans. $206.25. 6. A conveyancer sold a lot 25 ft. front and ground rent, redeemable on payment of $1500; ground-rent at 6% ? 50 ft. deep on what is the Ans. $90. 7. Mr. Tompkins bought on ground-rent a lot 75 ft. front by 90 ft. deep, valued at $87.25 per foot front; what would be.the ground-rent per foot front at 6%? Ans. $5.231. SUPPLEMENTARY PROBLEMS. To be omitted unless otherwise directed. 8. I made $5000 by a speculation, and wishing to invest it permanently, I bought $2000 6% bonds at 1173, and invested all the romainder possible in 4% bonds at 110 (denominations as low as $50); what surplus remained, brokerage %, and what was the annual income? Ans. Sur., $50.75; In., $225.75.⚫ 9. Mrs. Warner has $10,000 railroad 6's, quoted at 103; would she increase or diminish her annual income if she should sell them and buy with the proceeds 7 % bonds at 110? Ans. Increase, $58. 10. When gold was at a premium of 12 %, Mr. Barton conveyed a lot on a 6% ground-rent, payable in gold, and redeemable on payment of $4500; at what sum in currency must it be made redeemable to realize an equivalent rent, and what is the ground-rent in currency? Ans. $5062.50; Rent, $303.75. CASE II. 448. Given, the income, the rate of dividend, and the market value, to find the amount invested. 1. When 5% gas bonds are selling at 110, how much must be invested to produce an income of $550 ? SOLUTION.-Since $1 of stock gives an income of $.05, to give an income of $550 it will require $550÷.05, or $11000; $11000 of stock at 110% will cost $11000X1.10, or $12100. OPERATION. $550.05-$11000 $11000X1.10 $12100 Rule.-I. Find the par value of the stock by dividing the income by the rate. II. Multiply the par value by the market value of 1 share, to find the amount invested. WRITTEN EXERCISES. 2. A real estate dealer buys a 6% ground-rent of $300 per annum at par; what does it cost him? Ans. $5000. 3. A house subject to a ground-rent of $75 at 6% was sold for $5750; what was its value? Ans. $7000. 4. What sum must I invest in 6% street railway bonds, at 119, to secure an annual income of $600, brokerage %? Ans. $11975. 5. What sum must be invested in Kentucky 6's, at 103, to yield $786 a year, brokerage %? Ans. $13525.75. 6. When 41% government bonds are selling at 105, what sum must I invest in them to secure an income of $900, brokerage %? Ans. $21050. 7. If I sell $8000 Ohio 6's at 118, and buy sufficient Georgia 7's at 103 to yield $560 income, how much shall I have left, brokerage % on sale and purchase? Ans. $1160. 8. What must be the market value of Georgia 6's to realize 7% on the investment? What must I pay for Reading coupon 7's, to give an income of 63% ? Ans. 85; 10319. SUPPLEMENTARY PROBLEMS. To be omitted unless otherwise directed. 9. When gold was selling at 115, what must be paid for 6% gold bearing bonds to realize 7% on the investment? Ans. 984. 10. What must be the market price of 5 % bonds, so that, brokerage %, I may realize 4% on an investment? Ans. 1242. 11. I bought a lot 50 ft. front and 85 ft. deep, at a ground rent of $5.40 per ft. front; what would be the cost of the property, the ground rent being 6% of it? Ans. $4500. 12. How many shares of North Pennsylvania R. R. ($50) at 49, must be sold, that the proceeds, invested in Pennsylvania State 6's, at 115, may give an income of $600, brokerage being charged on sale and purchase? Ans. 237 shares; $8.37 surplus. 13. Mr. Jackson sold $15000 Union Pacific 7's at 101, and invested part of the proceeds in Illinois 6's at 117, sufficient to produce an income of $750, and deposited the remainder, (brokerage %), in bank; what was his bank deposit? Ans. $412.50. 14. I had some California 7's, which brought me in an income of $546, but preferring an investment nearer home, I decided to exchange them for Philadelphia 6's; if the California bonds were worth 117 and the Philadelphia 105, how much must I add to my investment to secure the same income, brokerage not considered? Ans. $429. CASE III. 449. Given, the market value, and the income or rate of dividend, to find the rate of interest on the investment. 1. What per cent. of income will be realized by purchasing 7% bonds at 95? SOLUTION.-$1 of stock will cost $.95, and pays $.07; if on $.95 the gain is $.07, on $1 it is as many per cent. as .07 .95, or 7%. OPERATION. .07.95.07 Rule. Divide the annual income or dividend of the stock by its market value, to find the rate of income. WRITTEN EXERCISES. 2. What is the rate of income of New York Central 6's bought at 106 ? Ans. 5%. 3. When 6% bonds are selling at 104, what per cent. will these bonds yield? Ans. 5.7+. 4. I bought an irredeemable ground-rent of $54 per annum for $850; what per cent. do I realize ? Ans. 6%. Ans. The 5's. 5. Which is the better investment, 5% bonds at 1133, or 4% bonds at 110? 6. Mr. Hull bought a ground-rent of $450 for $6575; what rate of income does it pay? 7. If I buy a $5000 mortgage at 24% discount, what rate of income do I receive on it? Ans. 6333%. interest at 6%, Ans. 67%. SUPPLEMENTARY PROBLEMS. To be omitted unless otherwise directed. 8. Which the more profitable investment, Missouri 6's at 102, or N. Y. 7's at 120? Ans. Mo. 6's. 9. Mr. Rogers bought Michigan 7's at 112, and afterwards exchanged them for 6% bonds at 1064; which was the better investnent? Ans. Mich. 7's. 10. Wishing to make a permanent investment, I am recommended to take either 5's at 75, 6's at 85, or 7's at 90; which is the best investment? Ans. 7's at 90. GENERAL TAXES. 450. A Tax is a sum of money assessed on persons or property for public purposes. 451. Taxes are assessed by the national government, a state, county, or town. 452. A Property Tax is a tax upon property. Property is of two kinds; Real Estate and Personal Property. 453. Real Estate is immovable property; as land, buildings, etc. Personal Property is movable property; as money, stock, furniture, etc. 454. A Poll Tax is a tax on the person. It is assessed in some states on each male citizen not exempt by law. 455. An Assessment Roll is a list or schedule contain ing the names of persons taxed, the valuation of their property, and the amount of their taxes. 456. An Assessor is an officer who appraises the pro perty and prepares the assessment roll. 457. The Quantities to be considered are: 1. The Taxable Property; 2. The Rate of Taxation; 3. The Amount of Тах. Real estate is often assessed by the proper officer for not more than or of its real value. The value of personal property may be given in by the owner under oath, or if he neglects to do this, it is valued by the officer. The term poll is from the German polle, the head. A poll tax is a capitation tax, from the Latin caput, the head. In some States the income from a person's occupation is assessed at a small sum and taxed. Money on interest secured by bond and mortgage is taxed in some States. After the taxes have been assessed, each person receives a notice of his taxation, stating the day of appeal, when he may appear before the proper officers and show reasons for correcting any mistakes that have been made. NOTE.-Government Taxes are taxes levied by the government, including Internal Revenue and Duties. They will be considered under the head of Duties and Customs. |
