TAXES

A Tax is a sum of money levied on persons or property for public purposes.

A Personal, or Poll Tax, is a tax on the person.

A Property Tax is a tax of a certain per cent on the assessed value of property.

Property may be either personal or real.

Personal Property consists of such things as are movable.
Real Property is that which is fixed, or immovable.

In Taxes,

The assessed value is the base.

The rate of taxation is the rate.
The tax is the percentage.

DUTIES

Duties are taxes on imported goods.

Duties are either Specific or Ad Valorem.

A Specific Duty is a tax on goods without regard to cost.

An Ad Valorem duty is a tax of a certain per cent on the cost of goods.

In Ad Valorem Duties,

The cost of the goods is the base.

The rate per cent duty is the rate.

The ad valorem duty is the percentage.

INTEREST

Interest is the sum paid for the use of money.

The Principal is the sum loaned.

The Amount is the sum of the principal and interest.
The Rate of Interest is the rate per cent for one year.

The Legal Rate is the rate fixed by law.

Usury is interest at a higher rate than that fixed by law.
Simple Interest is interest on the principal only.

To find the Interest when the Principal, Time, and Rate are Given. RULE. Multiply the principal by the rate expressed as hundredths, and this product by the time expressed in years.

To find the Time when the Principal, Interest, and Rate are Given. RULE. Divide the given interest by the interest for one year.

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To find the Rate when the Principal, Interest, and Time are Given. RULE. -Divide the given interest by the interest at one per

cent.

To find the Principal when the Interest, Rate, and Time are Given. RULE. Divide the given interest by the interest on $ 1.

To find the Principal when the Amount and Time and Rate are Given.

RULE. Divide the given amount by the amount of $1.

INTEREST BY ALIQUOT PARTS.

To find the Interest for Years, Months, and Days.

RULE. Find the interest for one year and take this as many times as there are years.

Take

Take the greatest number of the given months that equals an aliquot part of a year and find the interest for this time. aliquot parts of this for the remaining months.

In the same manner find the interest for the days.
The sum of these interests will be the interest required.

To find the Interest when the Time is Less than a Year.

RULE. Find the interest for the time in months or days that will gain one per cent of the principal.

Find by aliquot parts, as in the first rule, the interest for the remaining time.

The sum of these interests will be the interest required.

INTEREST BY SIX PER CENT METHOD.

To find the Interest at 6%.

RULE.For Years: Multiply the principal by the rate expressed as hundredths, and that product by the number of years. For Months: Move the decimal point two places to the left, and multiply by one-half the number of months.

For Days: Move the decimal point three places to the left, and multiply by one-sixth the number of days.

To find the interest at any other rate per cent, divide the interest at 6% by 6, and multiply the quotient by the given rate. To find Exact Interest.

RULE.-Multiply the principal by the rate expressed as hundredths, and that product by the time expressed in years of 365 days.

ANNUAL INTEREST

Annual Interest is interest payable annually. If not paid when due, annual interest draws simple interest.

To find the Amount Due on a Note with Annual Interest, when the Interest has not been Paid Annually.

RULE. Find the interest on the principal for the entire time, and on each annual interest for the time it remained unpaid. The sum of the principal and all the interest is the amount due.

COMPOUND INTEREST

Compound Interest is interest on the principal and on the unpaid interest, which is added to the principal at regular intervals. The interest may be compounded annually, semi-annually, quarterly, etc., according to agreement.

To find Compound Interest.

RULE. Find the amount of the given principal for the first period. Considering this as a new principal, find the amount of

it for the next period, continuing in this manner for the given time.

Find the difference between the last amount and the given principal, which will be the compound interest.

PARTIAL PAYMENTS

Partial Payments are part payments of a note or debt. Each payment is recorded on the back of the note or the written obligation.

UNITED STATES RULE. Find the amount of the principal to the time when the payment or the sum of two or more payments equals or exceeds the interest.

From this amount deduct the payment or sum of payments. Use the balance then due as a new principal, and proceed as before.

MERCHANTS' RULE. Find the amount of an interest-bearing note at the time of settlement.

Find the amount of each credit from its time of payment to the time of settlement; subtract their sum from the amount of the principal.

BANK DISCOUNT

Bank Discount is a percentage retained by a bank for advancing money on a note before it is due.

The Sum Discounted is the face of the note, or if interest-bearing, the amount of the note at maturity.

The Term of Discount is the number of days from the day of discount to the day of maturity.

The Bank Discount is the interest on the sum discounted for the term of discount.

The Proceeds of a note is the sum discounted less the bank discount.

Problems in bank discount are calculated as problems in interest.

In Bank Discount,

The sum discounted is the principal.

The rate of discount is the rate of interest.
The term of discount is the time.

The bank discount is the proceeds.

EXCHANGE

Exchange is making payments at a distance by means of drafts or bills of exchange.

Domestic Exchange is exchange between places in the same country.

Foreign Exchange is exchange between different countries.

Exchange is at par when a draft, or bill, sells for its face. value; at a premium when it sells for more than its face value; at a discount when it sells for less.

The cost of a sight draft is the face of the draft increased by the premium, or diminished by the discount.

The cost of a time draft is the face of the draft increased by the premium, or diminished by the discount, and this result diminished by the bank discount.

To find the Cost of a Draft.

RULE. Find the cost of $1 of the draft; multiply this by the face of the draft.

To find the Face of a Draft.

RULE.

draft.

Divide the cost of the draft by the cost of $1 of the

EQUATION OF PAYMENTS

Equation of Payments is a method of ascertaining at what time several debts due at different times may be settled by a single payment.

The Equated Time of payment is the time when the several debts may be equitably settled by one payment.

The Term of Credit is the time the debt has to run before it becomes due.