MISCELLANEOUS PROBLEMS

1. Sent my agent $2520 to invest in cotton cloth at 12¢ a yard. How many yards can he buy after deducting his commission of 2%?

2. After paying charges amounting to $17.20 and retaining a commission of 2%, an agent returned to his principal $774.15 as the net proceeds of a sale. What was the sales price?

3. A merchant bought through an agent 720 yards of carpeting at $1.25 a yard, and paid the agent % commission. The freight amounted to $7.37. At what price per yard must he sell the carpet to realize a profit of 20%?

4. An agent sold apples for $984 on a commission of 4%. He invested the net proceeds in flour, charging a commission of 21% for buying. What was the entire commission?

5. An agent sold a cargo of wheat on a commission of 1%. He sent the owner $44,325. What was his commission?

6. Sold lumber for $1,224 on a commission of 4%. Invested the net proceeds in wheat after retaining my commission of 2% for buying. Find the value of the wheat, and the total commission.

7. A man sent his broker $6007.50 to invest in U. S. bonds. What amount did the broker invest if he charged % commission?

8. A commission merchant received Jan. 1, 1915, 14,000 feet of #1 and #2 lumber, kiln dried, from the Southern Mills of Atlanta, Ga. The freight was $140.50; drayage, $50; insurance % of the gross sales. January 10, he sold 4 M @ $50 per M; Jan. 20, 5 M @ $52.50; and Jan. 25, 5 M at $55 per M. Storage charges were $20.25 and the agent's commission was 21%. Prepare an account sales, showing the transaction, and the net proceeds.

9. Bought through Brown & Co. 18 quart cans Bridgeport Penetrating Stains @ 56¢; 6 pound cans prepared wax @ 30¢; 30 pound cans Bridgeport Standard #10 wood filler @ 18¢; 50 pound cans Special White wood filler @ 18¢. Brown & Co.'s commission was 2% and the drayage $2. Prepare an account purchase, using the above facts, and any name you may wish as principal.

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10. I bought the following bill of goods through my agent, who charged me 21% commission: 200 ft. " rd. Norway iron, 34 lb. at $2.90 per cwt. (100 lbs.); 100 ft. " do. 27 lb. at $2.90 per cwt.; 150 ft. " do. 127 lb. at $2.90 per cwt.; 350 ft. ğ" do. 365 lb. at $2.90 per cwt.; 150 ft. sq. do. 52 lb. at $2.90 per cwt.; 300 ft. " 5" 16 flat Norway iron 256 lb. at $2.90 per cwt.; 300 ft. 3" x 3" do. 286 lb. at $2.90 per cwt. Find the amount of the bill, and the agent's commission.

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11. A commission merchant sold 80 bales of cotton, averaging 480 lb. per bale, at 16¢ per pound, charging 21% for selling, 3% for guaranty, and $24.36 for other expenses. He invested the net proceeds in coffee at 18¢ a pound, and charged 2% commission for buying. How many pounds of coffee did he buy?

12. A bought 3 invoices of green coffee, as follows: 2000 lb. @ 10; 18,000 lb. @ 11; 9000 lb. @ 13¢. He caused all to be mixed and roasted. He paid per lb. for roasting, and 1% commission for buying, and found that the coffee shrank 15% in weight by the roasting process. At what price would he need to sell the roasted mixture in order to yield him a profit of 10%?

CHAPTER XXII

SIMPLE INTEREST

292. Frequency of Problems in Interest.

of percentage, interest is the most general.

Of all the applications

There are few people

who do not need to figure interest at some time in their lives. Next to the four fundamental operations the subject of interest is probably the most important to the business man.

293. Interest. A man borrows $100 and at the end of one year he is obliged to pay back $106. The extra $6 which he pays is called interest.

294. Reason for Paying Interest. The custom of paying interest on borrowed money is now universal, and one cannot borrow in a business way without doing so.

On reflection the reasons for paying interest are obvious. If money could be borrowed without interest a man in a city could borrow, say $1000, to pay for the grading and beautifying of the lot around his house, and for the period between the borrowing of the money and the repayment of the loan, he would enjoy the increased beauty of his home with no extra expense to himself. Again, a farmer might borrow money to pay for clearing land, and up to the time of repaying the loan the increased production from the land would be clear gain. Under such circumstances, everybody would want to borrow and nobody would want to lend.

295. Interest on Investments in General. -The element of interest is by no means confined to cases where money has been loaned at a given rate. Any one engaging in business calculates to make a profit which first of all shall pay a reasonable rate of interest on the money invested. Stocks and bonds are bought because they yield dividends, and for no other reason. Every business investment is made on the expectation of a return that may be regarded as interest.

296. Principal, Amount. — The amount on which interest is paid is called the principal. The principal plus the interest is called the

amount.

297. Rate of Interest. A certain per cent of the amount borrowed is paid each year as interest.

The rate per cent of the principal which is paid each year as interest is called the rate of interest.

298. Time. In computing interest time is an essential element. That is, the interest is figured as so many per cent for a certain unit of time. The unit of time used in specifying the rate of interest is nearly always one year.

Thus, when we say that the rate of interest is 6%, we mean that 6% of the principal is paid each year as interest.

299. Interest Compared with Percentage.

When the time is

one year, problems in interest are problems in ordinary percentage. The principal is the base.

The rate of interest is the rate per cent.

The interest is the percentage.

The amount is the same in both.

ORAL EXERCISES

Find the interest in each of the following, the time in each being

WRITTEN EXERCISES

Find the interest in each of the following, the time being one year:

300. Time Other Than One Year. — In long time loans with simple interest, the interest is payable yearly and the time involved in each computation is therefore one year. Problems arise, however, in which the time is several years. In such cases, the interest is the interest for one year multiplied by the number of years.

Thus, the interest on $800 at 6% for four years is 4 times the interest for one year, or 4 X $48

=

$192.