12. $400, dated Mch. 4, 1871, payable July 24, 1871, discount 5%?

13. What is the difference between the bank discount and the true discount of $1319.50, due in 90 days, discounted at 6%? [For meaning of "due," see Note, p. 194.]

14. What is the difference between the bank discount and the true discount of $768, due in 108 days, discount 8%?

15. What is the difference between the bank discount and the true discount of $3330.80, due in 45 days, discount 7%?

16. A note, dated Apr. 10, 1871, is payable in 90 days: what is the time of its maturity?

NOTE. The date of maturity is found by counting forward the number of days plus three days, when the time is expressed in days; and the number of calendar months plus three days, when the time is expressed in months.

17. A note, dated Feb. 6, 1868, was payable in 60 days: what was the date of its maturity?

18. A note, dated Aug. 9, 1870, is payable 4 months from date what is the date of its maturity?

19. A note of $460, dated Apr. 3, 1870, and payable in 90 days, with interest at 6%, was discounted May 10, 1870, at 8% what were the proceeds?

SUGGESTION.-Find the amount of $460 for 93 days, at 6%, and then discount this amount for 56 days, at 8%.

20. A note of $125, dated May 21, 1870, and payable in 60 days, with interest at 6 %, was discounted May 25, 1870, at 10% what were the proceeds?

21. A note of $1000, dated Aug. 15, 1869, and payable in 6 months, with interest at 7%, was discounted Nov. 27, 1869, at 9% what was the bank discount?

SUGGESTION.-Compute the interest for 6 mo. 3 da., and the discount for 83 days.

22. A note of $90, dated Apr. 12, 1870, and payable in

4 months, with interest at 5%, was discounted June 1, 1870, at 7% what were the proceeds?

23. A note of $650, dated Mch. 2, 1869, payable Apr. 1, 1870, and indorsed $300 Oct. 1, 1869, was discounted Feb. 3, 1870: what were the proceeds at 6 % ?

24. For what sum must a note, payable in 60 days, be drawn to produce $493, when discounted at 8%?

25. For what sum must a note, payable in 90 days, be drawn to produce $1969, when discounted at 6%?

26. What must be the face of a note, dated July 5, 1871, and payable in 4 months, to produce $811, when discounted at 9%?

27. What must be the face of a note, dated Jan. 10, 1870, and payable in 3 months, to produce $1938, when discounted at 12%?

28. A merchant discounted a bill of $750, payable in 4 months, by deducting the interest for the time without grace, at 10%: what were the cash proceeds of the bill?

29. A note of $340, due in 9 months, without interest, was discounted by deducting the interest for the time, at 8% what was the cash value of the note?

30. A merchant having sold a bill of goods amounting to $1030, on three months' time, allowed 5% off for cash: what were the cash proceeds of the sale?

31. A retail dealer having bought $950 worth of goods, on 6 months' time, cashed the bill for 74% off: what were the cash proceeds?

32. A merchant bought, March 20, 1870, a bill of goods amounting to $3540, on three months' time, but, being offered 5% off for cash, he borrowed the money at a bank

for the time, at 10%, and cashed the bill. How much did he gain by the transaction?

FORMULAS AND RULES.

317. FORMULAS.-1. Bank discount =sum discounted X (int. of $1 for the days + 3 days).

2. Business discount: =sum discounted int. of $1 for the time.

3. Proceeds sum discounted-discount.

318. RULES.-1. To compute bank discount, Find the interest on the sum discounted at the given rate per cent. and for the actual number of days in the time plus three days.

2. To compute business discount, Find the interest on the sum discounted, at the given rate per cent. and for the given time.

3. To find the proceeds, Subtract the discount from the sum discounted.

4. To find the face of a note to yield given proceeds, Divide the given proceeds by $1 minus the interest of $1 for the given time with grace, and multiply $1 by the quotient.

NOTES.-1. In discounting a note bearing interest, the interest is computed by months or by days, according as the time is expressed in the note, but the discount is usually computed by days.

2. Business discount is computed by months or days, according as the time is expressed in the paper discounted, and with or without grace. In these respects it differs from bank discount.

3. Bank discount is not only interest paid in advance, but the interest is computed on both the proceeds and the discount. The borrower pays interest on more money than he receives.

PROMISSORY NOTES AND DRAFTS.

I. PROMISSORY NOTES.

319. A Promissory Note is a written agreement by one party to pay to another a specified sum at a specified time. The sum whose payment is promised, is called the Face of the note.

The person who signs a note is called its Maker; the person to whom it is payable is the Payee; and its owner is the Holder.

320. A Joint Note is a note signed by two or more persons who are jointly liable for its payment.

321. A Joint and Several Note is a note signed by two or more persons who are both jointly and singly liable for its payment.

322. An Indorser is a person who signs his name on the back of a note as security for its payment.

323. The following are the more common forms of promissory notes:

FORM I.-DEMAND NOTE.

$95.

NASHVILLE, TENN., May 1, 1870.

For value received, I promise to pay to John Wilson, on

Ninety days after date, I promise to pay to John Wilson, or bearer, Ninety-five Dollars, with interest, for value received.

50 100

Four months after date, we jointly and severally promise

to pay Henry Cooke, or order, Ninety-five terest at 8%, for value received.

[ STAMP.]

THOMAS HUGHES,

CHARLES G. KNIGHT.

$500.

FORM IV.-NOTE PAYABLE at a Bank.

BALTIMORE, MD., Apr. 10, 1870.

Sixty days after date, we promise to pay to Wilson, Hinkle & Co., or order, at the First National Bank, Five Hundred Dollars, for value received.

[STAMP.]

CHARLES COOKE & Co.

REMARKS.-1. A note should contain the words "value received," otherwise the holder may be required to prove that the maker received its value.

2. When the time for the payment of a note is not specified, it is due on demand. If the place of payment is not mentioned, it is payable at the maker's residence or place of business.

3. When a note contains the words "with interest," and no rate is specified (Form II.), interest accrues at the legal rate. If the words "with interest," are omitted (Form IV.), no interest accrues until after maturity, when the note draws interest, at the legal rate, until paid.

324. A Negotiable Note is one which may be bought and sold.

66

A note is negotiable when it is made payable "to the bearer," or to the payee 66 or bearer," or to the payee or order," or "to the order of" the payee. A note drawn as in Form I. is not negotiable. A note made payable to the bearer is negotiable without indorsement. U. S. treasury notes and bank notes, used as money, are payable to the bearer, and are transferred by delivery.

A note payable to order must be indorsed by the payee before it is negotiable.

When the payee indorses a note by simply writing his name on the back, it is called an indorsement in blank, and the note is payable to the holder. When the indorser orders the payment to be made to a particular person, as: "Pay to Charles Williams," it is called a special indorsement.

325. If the maker of a note fails to pay it at maturity, a written notice of the fact, made by a notary public, is served on the indorsers, who are responsible for the payment of the note. Such a notice is called a Protest.