PROBLEMS

Use the Merchant's Rule to solve the following:

1. Face of note $3000, date Aug. 15, 1916, rate of interest 6%. The note is indorsed as follows: Nov. 1, 1916, $400; Jan. 20, 1917, $600, May 1, 1917, $500. Find amount due Aug. 1, 1917.

2. Face of note, $5000, date Dec. 15, 1914, rate of interest 6%. Payments as follows: Jan. 31, 1915, $2000; June 1, 1915, $1500; Sept. 15, 1915, $1000. Find the amount due Jan. 1, 1916.

3. Note of $1500, dated June 5, 1917, bearing interest at 5%. Payments: Aug. 1, $500; Oct. 2, $300; Dec. 10, $200. Find the amount due Jan. 14, 1918.

4. Note for $2000 given July 1, 1914, interest 6%. Payments: Oct. 1, $800; Feb. 1, 1915, $500; June 1, 1915, $600. Find the amount due Oct. 15, 1915.

Solve each of the following both by the United States Rule and by the Merchant's Rule. Can you explain the reason for the difference?

5. Note for $4000 given Aug. 10, 1914, interest 6%. Payments: $2500, Sept. 15, 1912; $1000, July 15, 1918. Find amount due Sept. 1, 1918.

6. $2600.

Johnstown, Pa., July 1, 1912.

One year after date for value received, we or either of us, promise to pay Lucy Ward - Twenty-six Hundred Dollars, with interest at 5%.

James Morrison
Roger Lewis

Indorsements: Apr. 10, 1913, $1000; Sept. 25, 1913, $500; Feb. 14, 1914, $800. What was due on date of settlement Aug. 25, 1915?

7. Note for $750. Date, Sept. 10, 1912. Interest 4%. Payments : Dec. 24, 1912, $200; Jan. 30, 1913, $200; July 1, 1913, $200. Settlement Nov. 14, 1913. What was the amount due?

8. Note for $10,000. Apr. 1, 1913, interest 6%. Payments: Dec. 15, 1913, $5000; Jan. 1, 1914, $3000; Apr. 1, 1915, $1000. Settlement Apr. 1, 1916. What was the amount due?

MISCELLANEOUS WORK

1. Find the amount due Jan. 1, 1918, on the following note: Face of note $2740, date March 1, 1917, interest 6%. Payments May 15, $500, July 1, $350, Sept. 18, $800, Nov. 1, $650.

2. A farm of 385 acres rents for $6.50 per acre. It has charged against it, taxes $180, insurance $48.50, and other expenses $27.50. What was the cost of the farm if it yields 54% on the investment?

3. At a rate of 41%, what is the interest on $2450 for 67 days? 4. Find the present worth and the true discount of a note for $39,600 bearing interest at 6% and due in 120 days, the value of money being 4%.

5. A bought a business block for $125,000. Yearly expenses were : Taxes, $4800; repairs, $2850; service and heat, $6225; depreciation, $2500. Income from rent $25,340.. What was the net rate of income on this investment?

20. A man bought a property for $9750, kept it 2 years, during which time he received $2460 in income from it, and expended $1050 on it. He then sold the property for $10,000. What was his yearly rate of interest on this investment, assuming that the income and expenditures were both settled at the end of the first year? Suggestion: Compute interest on the balance of the expenditure-income account for 14 years. Avoid compound interest.

CHAPTER XXIX

BANKS AND BANK DISCOUNT

447. Functions of a Bank. - Banks are institutions whose business it is to receive money, to pay it out again when demanded, and to make loans.

Nowadays people seldom keep large sums of money on hand. It is deposited in banks and drawn out as needed.

To open an account in a bank a

To make a deposit a "deposit slip" is made out showing the amount deposited in checks, in bills, in currency, and in coin. The deposit slip also has written on it the name of the depositor.

When the account is first opened the depositor signs his name on a card which is deposited in the bank and kept to compare with the signatures on his checks which will come in later.

A bank usually requires references when opening an account with a stranger, since an irresponsible or dishonest depositor may be harmful to the bank.

EXERCISES

Make out deposit slips in your own name for the following deposits: 1. Check, $74.80; check, $107.60; check, $31.50; currency, $65; silver, $17.25.

2. Check, $75; check, $93.40; check, 140.26; gold, $20, $25, $10; silver, $20.25.

449. The Checking Account. The usual account which a business house has in banks is what is called a "checking account."

Money in a checking account may be withdrawn at any time by presenting a check for the amount which it is desired to withdraw.

450. Making Out a Check.

There are certain features of a check which should be noticed: The amount of the check is written in figures and also in words. To make it difficult to raise the check the figures are written near the $ sign, and the words specifying the sum begin close to the left end of the check.

This check directs the bank to pay to James B. Baker the sum of $350.50. When the check is paid the bank deducts this amount from Mr. Snyder's account.

Checks are used very extensively because of their convenience and safety. In our larger cities over 90% of all bills are paid by check.

451. Identification. If Mr. Baker is not known at the bank, he must be identified before he can secure money on the check. That is, he must be introduced by some person known to the bank. If a check should be lost or stolen and presented for payment by one not entitled to receive it, the bank would be responsible to the rightful owner if the check were cashed. The bank requires the man who cashes the check to write his name on the back of it. This serves the bank as a receipt. Any bank will cash a check drawn on it or any other bank provided the party presenting it is properly identified.

452. Clearing House. In the large cities every bank during a day's business cashes checks on many other banks. At some time during the day, representatives of all the banks meet in what is called the clearing house to settle the mutual indebtedness thus resulting.

453. Balance in Bank. - The amount of money which one has in a bank is called his balance in the bank. The balance in the bank at any one time is obtained by adding all the deposits and subtracting the amount of all the checks drawn out. The balance is always recorded on the check stub. Every deposit is added and every check drawn is subtracted. This enables one to see at a glance how much is left. Frequently one page of stub contains the record of the amount brought forward and of three or four checks drawn out. Find the balance to be carried forward by the process of § 41.

WRITTEN EXERCISES

Find the balance to be carried forward in each of the following: 1. Bal. brought forward $6829.80 2. Bal. brought forward $165.00

3. Bal. brought forward $17500.45 4. Bal. brought forward $1984.10

5. Bal. brought forward $8765.10 6. Bal. brought forward $2996.40