NOTE. The work may be shortened by calculating the interest for the sum of the times during which the different interests remain unpaid. WRITTEN EXERCISES. 2. What is the interest due on a note for $840, dated March 2, 1872, interest payable annually, if no payments are made till Sept. 9, 1876? Ans. $252.90. 3. How much is due Jan. 1, 1877, on a note for $1000, dated June 16, 1873, interest payable annually at 7%, if the yearly interest has been regularly paid? Ans. $1038.69. 4. $1250. CONCORD, N. H., Feb. 10, 1871, For value received, I promise to pay to the order of Jacob Clark, on demand, One Thousand Two Hundred and Fifty Dollars, with interest annually. THOMAS MAYNARD. What was due on this note, June 11, 1875, if the annual interest was paid up for the first two years? PARTIAL PAYMENTS. Ans. $1432.73. 490. Partial Payments are payments in part of notes or other obligations bearing interest. 491. An Indorsement is an acknowledgment of a pay ment written on the back of the obligation, stating the time and amount of the payment. The term Indorsement is used in different business papers, in each case, however, meaning a writing on the back, from the Latin dorsum, the back. 1. The writing of the name on the back of a check, draft, note, etc., is called a General Indorsement. or an indorsement in blank. 2. A Special Indorsement directs the obligation to be paid to some par ticular person, or to his order. 3. An acknowledgment of the payments on a note, written on the back of it, is also an indorsement. The person holding the obligation signs his name to this statement as a receipt. 492. The Supreme Court of the United States, and nearly all the States, adopt the following rule for partial payments, called THE UNITED STATES RULE. I. Find the amount of the principal to the time of the first payment; if the payment equals or excecds the inter est, subtract the payment from the amount and treat the remainder as a new principal. II. If the payment is less than the interest, find the amount of the same principal to the time when the sum of the payments shall equal or exceed the interest due, and subtract the sum of the payments from the amount. III. Proceed in the same manner with the remaining payments until the time of settlement. NOTE. This rule is founded upon the decision of Chancellor Kent. The principle is, that neither interest nor payment shall draw interest. It has been adopted by nearly all the States-New Hampshire, Vermont, and Connecticut being the principal exceptions. 1. $600 MILLERSVILLE, PA., July 12, 1870. Four years after date, I promise to pay Henry Wilson, or order, Six Hundred Dollars, with interest, for value received. CHARLES HARDING. On this note were the following indorsements: Balance due after first payment 500.00 Interest on balance to second payment is $47.00. The pay ment being less, is not deducted. Interest from first payment to third payment 69.00 2. $4000 LANCASTER, PA., May 10, 1870. Five years after date, for value received, I promise to pay Robert Turner, or order, Four Thousand Dollars, with interest from date. MORTON BLACK, Jun. Indorsements: May 10, 1871, $300; May 22, 1872, $250; June 16, 1873, $70; July 30, 1874, $175. How much was due May 10, 1875? Ans. $4389.58. 8. $800. COLUMBIA, PA., March 10, 1870. For value received, on demand, I promise to pay W. H. Fisher, Eight Hundred Dollars, with interest. W. H. CROTHERS. Indorsements: Feb. 16, 1871, $10.00; Oct. 20, 1871, $75.00; Jan. 14 1872, $15.00; April 26, 1872, $10.00. The note was settled Sept. 1, 1872; what was then due? Ans. $808.25. 4. A note of $7000 was given Jan. 1, 1872. Indorsements: May 3, 1873, $400; Aug. 8, 1874, $70; Sept. 9, 1875 $120; Oct. 7, 1876, $950. What was due Jan. 1, 1877, Int. 7%? Ans. $7910. 5. A note of $5860 was given Sept. 10, 1874. Indorsements: Aug. 16, 1875, $150; May 18, 1876, $350; Dec. 28, 1877, $95; Nov. 17, 1878, $112. What was due Jan. 1, 1879, Int. 5%? Ans. $6414.66. 6. A note of $3500 was given May 12, 1870. Indorsements: Jan. 16, 1871, $50; July 10, 1871, $25; Dec. 18, 1871, $250; June 20, 1872, $475; Aug. 20, 1873, $75; Sept. 30, 1873, $35. What was due Jan. 1, 1874, Int. 6% ? Ans. $3320.72. 493. Business men generally settle notes and interest accounts, payable within a year, by the following rule, called the MERCHANTS' RULE. I. Find the amount of the principal to the time of settle. ment, and also the amount of each payment to the time of settlement. II. Subtract the sum of the amounts of the payments from he amount of the principal, for the balance due. NOTES.-1. In some States merchants apply this rule to notes for longer periods by reckoning the interest for 1 year, and subtracting from the amount the amounts of the payments made during the year, and taking his balance for a new principal. 2. As the periods in these notes are all short, the interest should be cal culated for the number of days. 1. $5480. PHILADELPHIA, Jan. 1, 1875. Sixty days after date, for value received, I promise to pay Joseph Trotter, or order, Five Thousand Four Hun dred and Eighty Dollars, without defalcation. JAMES TAYLOR. Indorsements: March 15, $200; June 12, $300; Aug. 9, $500; Oct. 1, $700. What is due Dec. 3, 1875? Ans. $3994.86 2. A note of $4774.25 was given Nov. 9, 1875. Indorsements: Jan. 1, 1876, $500; Feb. 12, $600; April 17, $450; Juo 10, $247.50; Aug. 1, $250. What is due Oct. 1, 1876, at 7% ? Ans. $2953.592. 3. A note was given for $1250, April 20, 1874. Indorsements: May 10, $200; July 17, $50; Sept. 25, $140; Oct. 19 $150; Dec. 12, $350. What was due April 20, 1875, at 5% ? Ans. $396.89. NOTE.-For Connecticut, Vermont, and New Hampshire rules, see Brooks's Higher Arithmetic. DISCOUNT AND PRESENT WORTH. 494. Discount is an allowance made for the payment of money before it becomes due. 495. The Present Worth of a debt payable at a future time without interest is such a sum as, being on interest for the time at a certain rate, will amount to the debt. 496. The True Discount is the difference between the amount of the debt and the present worth. NOTES.-1. The true discount is the interest on the present worth for the time between the payment of the debt and the time it becomes due. 2. The present worth corresponds to the principal, the discount to the interest, and the debt to the amount; hence the different cases may be solved as in Interest. OPERATION. 1. What is the present worth of $585, due 5 years hence without interest, money being worth 6% ? SOLUTION.-The amount of $1 for 5 years, at 6%, is $1.30, hence the present worth of $1.30 is $1, and the present worth of $585 is as many times $1 as $1.30 is contained times in $585, which is $450. Hence $0.06×5 $0.30 $585÷1.30=$450, Ans, Rule.-I. Divide the given sum by the amount of $1 for the given rate and time, to find the present worth. I Subtract the present worth from the given sum to find the discount. NOTE. When several payments are made without interest, find the present worth of each separately, and take their sum. WRITTEN EXERCISES. 2. What is the present worth of $1206, due 5 yr. 8 mo. hence without interest, money worth 6% ? Ans. $900. 3. What is the discount of $6460, due 4 yr. 10 mo. 12 da. hence without interest, money worth 6%? Ans. $1460. 4. A owes $2178 payable in 3 yr. 9 mo. without interest, but wishing to pay it immediately, what should he in equity pay, money worth 7 per cent.? Ans. $1725.14+. 5. B bought $2500 worth of goods on what allowance should be made, if the diately, money being worth 6%? 6 mo. 18 da. credit; bill be paid immeAns. $79.87-. 6. I can sell my horse for $280 cash or $300 on 1 yr. 6 mo. credit; I choose the latter; how much did I lose, money being worth 6 per cent.? Ans. $4.77+. SUPPLEMENTARY PROBLEMS. To be omitted unless otherwise directed. 7. A gives his note for $850 payable in 2 yr. 8 mo. without interest; at the end of 8 mo. he wishes to pay the note; what should the holder of the note receive? Ans. $758.93-. 8. A man owes $600, of which one-third is to be paid in one year and the remainder in two years; what is the present value of the note, money worth 6 per cent ? Ans. $545.82. 9. What is the present worth of $2400, one-fourth due in 8 mo., one-third in 1 year, and the remainder in 18 mo., money being worth 6 per cent? Ans. $2249.07. BANK DISCOUNT AND BANKING. 497. A Bank is an incorporated institution which receives and loans money, or furnishes a paper circulation. 498. A Bank of Deposit is one which receives money or its equivalent on deposit, to be drawn at the order of the depositor. 499. A Bank of Discount is one that lends money, discounts notes, drafts, etc. A Bank of Issue is one that makes and issues notes to circulate as money. Some banks unite two and some all of these offices. A Savings Bank is one that receives small sums on deposit, and pays interest to its depos |
