16. The discount on a note for $400 for 60 days, exact time, is $6.00. Find the rate of discount.

17. A broker buys a $300 note, thirty days before maturity, for $297. Find the rate of discount.

18. Mr. James sold a horse for $155, and took the purchaser's note, dated Jan. 20, 1905, due in one year, with interest at 41%. Mr. James sold the note to the Farmers' Bank, Oct. 10, at 7% discount. How much did he realize?

19. A note for $1800, at 8%, dated August 1, due in 3 months, was discounted October 6, at 6%. Find the proceeds.

20. What should the Merchants' National Bank pay for a note of $1200, bearing 8% interest, dated April 12, due in 4 months, if purchased June 1, at 6% discount?

21. What are the proceeds of a note for $2500, dated February 10, 1907, and due in 4 months, without interest, if discounted March 24, at 6% ?

22. A merchant's bank book shows a balance of $1375.50, and he presents at the bank the following notes, which are discounted June 1, at 6%, and placed to his credit:

Find his balance in bank then.

23. For how much must I give my note, discounted at a bank for 60 days, at 6%, to realize $990 ?

NOTE. The proceeds of $1, discounted for 60 days, at 6% = $.99.

24. For what sum must I draw my note so that when discounted at 6% for 90 days I may realize $2758?

EXCHANGE

Paying Bills at a Distance

What is meant by a debtor? by a creditor? How may a debtor pay a bill in a distant city without the actual transfer of cash? How may a creditor collect a bill in a distant city without the actual transfer of cash?

Exchange is a method of paying or collecting bills at a distance without the actual transfer of money.

There are several different ways in which bills may be paid at a distance without the transmission of money:

(1) By a postal money order.
(2) By an express money order.
(3) By a telegraphic money order.
(4) By a personal check.

(5) By a bank draft (banker's check).

Paying by postal or express money order.

If

you wish to order from Siegel, Cooper & Co., Chicago, $15 worth of merchandise, unless you have credit there, you will probably send them (1) either a postal money order, or (2) an express money order. The first will direct the postmaster at Chicago, the second some express agent at Chicago, to pay to the order of Siegel, Cooper & Co. $ 15.

The cost of either of the above orders is the same; the only difference being that a postal money order is payable to the order of the party or firm upon identification at the place named in the order, while an express money order is payable to the party or firm upon identification at any office of the same company where orders are sold.

Money orders may be purchased for any amount up to $100, payable to any person or firm in the United States, or foreign countries where such orders are sold.

The rates charged in the United States are as follows :

The rates to foreign countries are from 10% to $1 for the same amounts as domestic orders.

This fee of from 3 to 30 for domestic orders, and from 10 to $1 for foreign orders, to cover the cost of paying the bills at a distance, is called the exchange for issuing the orders.

Paying by telegraphic money order.

Such orders are drawn by agents of the telegraph company, and direct the agent at some designated office to pay to the person named in the telegraphic message, upon identification, the sum specified.

The present rates for sending money by telegraphic order are as follows: For $25 or less, double the cost of a ten-word message, plus 25 4. Above $25, double the cost of a ten-word message, plus 1% of the amount of the order.

Paying by checks.

Business men find it necessary to pay bills in their vicinity or at a distance, almost daily, and if their financial standing is good, their checks are generally accepted in payment. In fact, most bills to-day are paid by checks.

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Sometimes the seller does not know the financial standing of the chaser, and therefore requires the check accompanying the order to be certified; that is, the cashier of the bank on which the check is drawn stamps the word "certified," with the date and his signature, across the face of the check. The check is thereafter the check of the bank, and is good as long as the bank is solvent.

A certified check is a notice to the payee of the check that the amount named on the face has been taken from the maker's deposit and placed with the bank's funds for the payment of the check when presented.

Certified checks are frequently demanded in payment of notes and collections at banks, and in payments where the payee does not wish to take a personal check. Like other checks, they are mailed daily in payment of bills in all parts of the country.

1. What is a check? What are the essentials of a check? 2. In buying a lot from James Carothers for $800, you are asked to give your certified check for the amount. Write the check on your local bank, yourself being the maker.

3. Moore & Co., Youngstown, Ohio, purchase $825 worth of furniture at 20% and 10% off from James Boydson & Co., Detroit, Mich., 3% off for cash in 10 days. They send a certified check within ten days on the Diamond Trust Co., of which James Patterson is secretary and treasurer. Write the certified check in payment of the bill.

NOTE.

The secretary and treasurer of a trust company corresponds to the cashier of a bank.

4. William Anderson, 7531 Hermitage Ave., Chicago, Ill., receives a check on the First National Bank of Wilkinsburg, Pa., from Freeman Lewis for $730.80 in settlement of an estate. The Commercial National Bank of Chicago charges Mr. Anderson $1.50 for collecting the check. This fee is called the exchange for collecting.

A person who cashes a check at a bank in which he is not a depositor is frequently charged an exchange of 10 and upward, according to the amount of the check.

Paying by bank draft.

A draft is a check drawn by one bank on another.

As New York City and Chicago banks collect exchange on outside checks, nearly all banks keep deposits there, as

well as in most of the other large commercial centers, to accommodate their depositors and others, who have occasion to remit payment for bills in any part of the country.

Banks usually charge exchange on drafts to cover the cost of keeping funds on deposit at these commercial centers. This fee varies from 1%% to 1% of the face. When the draft is less than $100, a fixed charge is frequently made, varying from 10 to 50%.

The custom of banks is not to charge depositors for drafts.

In issuing or collecting a draft, the exchange is either a fee or a certain per cent of the face of the draft.

New York and Chicago drafts are usually cashed at any point in the United States without exchange. Drafts on other large cities are cashed without exchange in the territory contiguous to those cities.

Brown & Foster, Cleveland, O., buy $2500 worth of merchandise from John Wanamaker & Co., New York; and $650 worth of machines from the Wheeler Wilson Co., Bridgeport, Conn. The business method of paying these bills is either by a check or by a bank draft. The draft is made payable to the order of the purchaser, who indorses it in full to the payee. For example:

Cleveland Mational Bank

Cleveland, Ohio, June 2, 1097, No. 1040

Pay to the order of Brown & Foster------$250000.

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