434 dated and discounted Aug. 6, and payable in 3 mos. without interest? 38. A note for $8000, dated May 2, 1907, payable in 6 mos. with 7% interest, was sent to the bank for deposit May 29. How much more will be passed to the holder's credit if the discount be found for the calendar months than if it were to be found for the exact days? 39. I borrowed $2000 March 10; $1500 March 31; $1200 April 17; and $1800 April 25. April 30 I drew a note for $7000, one-half payable in 60 days and the remainder in 3 mos. The note was discounted on its date at 6%. How much of the proceeds did I have remaining after paying the several loans and interest? 40. Jan. 5, 1907, bought of Chas. H. Brooks, terms net cash, 56 bbls. sugar averaging 319 lbs. to the barrel, 5 cts. per pound. Gave him $400 cash. For what amount must I draw my 60-day note so that if discounted on its date the proceeds cancel the bill? 41. The notes of a manufacturing company were selling "on the street" at a 10% discount. Knowing their paper to be safe for an investment, I purchased the following notes June 30, and immediately deposited them at my bank : One for $6000, dated June 18, payable in 3 mos. The notes were all paid in full by the company. 42. On June 3, 1907, I deposited at my bank the following: A note for $1200 dated April 22, 1907, bearing 2 yrs. interest at 4%, and a 60-day sight draft for $900, accepted May 15, 1907. Both were discounted at 6%. What sum was passed to my credit? ! 43. Sept. 12, 1907, I held a note for $6750, maturing in 60 days. Desiring the present worth of this note for immediate use, I had it discounted at my bank at 4%. I could have sent the note to a broker who would discount it at 4%, and charge % for his fee. Did I gain or lose by sending to the bank? How much? 44. Sept. 15, 1907, I deposited the following paper at my bank: A note for $450, dated July 10, payable in 4 mos. A note for $5000, dated Aug. 11, payable Sept. 21. How much was passed to my credit? 84. To find the sum for which a note must be drawn so that, if discounted on its date, the proceeds will be a given sum. - Up to this point in our work all notes for loans have been considered as drawn according to the custom among individuals, - viz., by making the sum loaned the face of the note. Except for special reasons banks will not loan in this manner, their custom being to deduct interest in advance for the full term of the note. Thus it will be seen that the actual loan is smaller than the face of the paper. By the following rule we determine the face of a note to secure a given loan at the bank. RULE. Find the interest on the desired proceeds for the time for which the note is to run at the given rate of discount. Find the interest on this interest for the same time and rate. Find the interest on this interest as before. Add the proceeds and the several interests. The sum will be the face of the note. NOTE. The old rule, to "divide the required proceeds by the proceeds of $1.00 for the given time and rate," is regarded as rather tedious, but perhaps more accurate. Unless the sum be very large, or the time longer than that for which notes are usually written, the rule given above will give the correct result. In case of a large sum or long time, or both, it is only necessary to continue finding interest on interest to make the necessary correction. EXAMPLES. 1. For what sum must a 60-day note be drawn so that if discounted on its date the proceeds will be $3000? 2. I wish to obtain at the bank a loan of $5200 for 90 527919 days. What should be the face of the note to cover discount and proceeds? 3. I owe $10000, and in payment give a note for $6000 that will mature in 25 days, discounted at 5%. How large a 63,5 note must I draw payable in 2 mos. so that when discounted on its date the proceeds will pay the balance of my debt? 4. A debt of $7500 is to be cancelled by two notes. One is a note for $6000, maturing in 1 month. The other is to 531, 3 be drawn at 30 days for such a sum that when discounted on & its date the proceeds of both notes will pay the debt. What shall be the face of the second note, the rate of discount in both cases being 5% ? 5. For what sums must notes be drawn for discount on their dates at 7% for the given times to cover the given sums and discount? A proceeds of $1500 for 90 days. A proceeds of $20000 for 15 days. 6. I purchased goods amounting to $875 on 6 months' credit, 5% discount being offered for cash. I immediately accept the cash offer, and have my note for 60 days discounted at the bank at 6% for just enough to settle the account. What was the face of the note? PERCENTAGE. 85. PERCENTAGE is the term applied to operations in figures in which 100 is used as the basis of computation. 86. The term " per cent." [Latin per centum] means by the hundred, or, more simply, hundredths. It may be expressed in three different ways—by the sign %, by a decimal, and by a fraction. As hundredths occupy two decimal places, every per cent. requires two or more decimal figures. If a given per cent. is less than 10. a cipher must be prefixed to the figure denoting it. Thus 2% is written .02. 87. The elements of percentage are: the BASE, the RATE, and the PERCENTAGE. If any two are given the other can be found. 88. The BASE is the number of which a number of hundredths are taken. 89. The RATE is the number of hundredths taken. 90. The PERCENTAGE is the result obtained by taking a certain number of hundredths of the base. Statement. 20% of 250 is 50. 250 is the Base, 50 is the Percentage, and 20% is the Rate. To read per cent. expressed decimally: RULE. Call the first two decimal figures per cent. and those on the right decimal parts of 1%. |