4. What is the bank discount on a note of $556.27, payable in 60 days, discounted at 6 per cent. interest?

5. A has a note against B, for $3456, payable in three months; he gets it discounted, at 7 per cent. interest: how much does he receive?

6. What is the bank discount on a note of $367.47, having 1 year, 1 month, and 13 days to run, as shown by the face of the note, discounted at 7 per cent.?

7. What is the bank discount, on a note at 5 months, for $672.50, dated August 7th, 1862, the interest being 6 per cent.?

8. Mr. Jones gave his note at bank, for 8 months, at 7 per cent., for $1670: what was the product?

NEW YORK, July 3d, 1860.

9. For value received, I promise to pay to John Jones, on the 20th of November next, six thousand five hundred and seventy-nine dollars and fifteen cents.

PHILIP MASON.

What will be the discount on this, if discounted on the 1st of August, at 6 per cent. per annum?

CASE II.

308. To make a note due at a future time, whose present value shall be a given amount.

1. For what sum must a note be drawn at 3 months, so that, when discounted at a bank at 6 per cent., the amount received shall be $500?

ANALYSIS.-If we find the interest on 1 dollar for the given time, and then subtract that interest from 1 dollar, the remainder

303. What is a bank?-304. What is bank discount?-305. What is a promissory note? How is the interest paid at a bank? 306. By mercantile usage, when does a note at bank fall, due? What are these days called?

307. How do you find the discount and present worth?

308. How do you make a note payable at a future time, whose present value shall be a given amount?

will be the present value of 1 dollar, due at the expiration of that time. Then, the number of times which the present value of the note contains the present value of 1 dollar, will be the number of dollars for which the note must be drawn.

OPERATION.

Interest of $1 for the time, 3 mos. and 3 days = $0.0155, which taken from $1, gives present value of $10.9845; then, $500÷ 0.9845 $507.872+ face of note.

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PROOF.-Bank interest on $507.872, for 3 months, including 3 days of grace, at 6 per cent. = 7.872; which being taken from the face of the note, leaves $500 for its present value.

Hence, we have the following

Rule.

Divide the present value of the note by the present value of 1 dollar, reckoned for the same time and at the same rate of interest, and the quotient will be the face of the note.

Examples.

1. For what sum must a note be drawn, at 7 per cent., payable on its face in 1 year 6 months and 15 days, so that, when discounted at bank, it shall produce $307.27 ?

2. A note is to be drawn, having on its face 8 months and 12 days to run, and to bear an interest of 7 per cent., so that it will pay a debt of $5450: what is the amount?

3. What sum, 6 months and 9 days from July 18th, 1862, drawing an interest of 6 per cent., will pay a debt of $674.89 at bank, on the 1st of August, 1862 ?

4. Mr. Jones bought a bill of goods amounting to $1683.75, and paid the bill with a note running 6 months for what amount must the note be drawn, that, when discounted, the merchant will receive exactly the amount of the bill, supposing interest to be at 7 per cent.?

5. Mr. Wilson is indebted at the bank in the sum of $367.464, which he wishes to pay by a note at 4 months, with interest at 7 per cent.: for what amount must the note be drawn?

EXCHANGE.

309. EXCHANGE is a process of remitting money from one place to another, by means of written orders.

310. A BILL OF EXCHANGE is a written order from one person to another, to pay to a third party a specific sum, at a given time.

311. The DRAWER, or MAKER, is the person who draws the bill.

312. The DRAWEE is the person on whom the bill is drawn. 313. The PAYEE is the person to whom the money is ordered to be paid; and he is the owner of the bill.

314. The PAYER, or REMITTER, is any person who purchases a bill of exchange, either of the drawer or payee.

315. An ACCEPTANCE is an agreement of the drawee, to pay the bill when it falls due, and is signified by writing, Accepted," with his signature, on the face of the bill.

316. An INDORSEMENT of a bill, by the payee, is the writing of his name on the back of it. This transfers the bill to any person who may rightfully hold it. Or, if he writes on the back, "Pay to John James or order," then the bill is transferred to Mr. James.

317. DAYS OF GRACE are days granted to the person who pays a bill, after the time named in it has expired. In the United States and Great Britain, 3 days are generally allowed.

318. An INLAND BILL is when the drawer and drawee both reside in the same country.

319. The COURSE OF EXCHANGE is the difference between the face of a bill, and the price paid for it.

320. PAR OF EXCHANGE is when the face of a bill and the price paid, are the same.

321. PREMIUM is when the price paid- is greater than the face of the bill, and the exchange is then said to be, above par

322. DISCOUNT is when the price paid is less than the face of the bill, and the exchange is then said to be, below par.

Rules of Articles 257, 262, and 308, apply to all cases of Exchange.

Examples.

1. A merchant at Chicago wishes to pay a bill in New York, amounting to $3675, and finds that exchange is 14 per cent. premium: what must he pay for his bill?

2. A merchant in Philadelphia wishes to remit to Charleston, $8756.50, and finds exchange to be 1 per cent. below par: what must he pay for the bill?

3. A merchant in Mobile wishes to pay in New York, $6584, and exchange is 2 per cent. premium: how much must he pay for such a bill?

4. A merchant in Boston wishes to pay in New Orleans, $4653.75; exchange between Boston and New Orleans is 1 per cent. below par: what must he pay for a bill?

5. A merchant in New York has $3690, which he wishes to remit to Cincinnati; the exchange is 14 per cent. below par: what will be the amount of his bill?

6. What must be paid for the following bill, when exchange is at 2 per cent. premium?

$950.50.

NEW YORK, May 9th, 1860.

Thirty days after date, pay to Samuel Lewis or order, Nine hundred and Fifty dollars and Fifty cents, and charge the same to my account. DANIEL SHAW.

To Messrs. JONES & WILLIS.

7. If exchange is at 1 per cent. premium, what bill will $3950 purchase?

8. If exchange is at 1 per cent. premium, what bill of exchange can be bought for $762, uncurrent funds, supposing a discount of per cent. is charged on the funds?

FOREIGN BILLS.

323. A FOREIGN BILL OF EXCHANGE is one in which the drawer and drawee live in different countries.

England and France are the principal countries with which the United States have exchanges.

In all Bills of Exchange on England, the £ sterling is the unit or base, and is still reckoned at its former value of $43 $4.4444+, instead of its present value, $4.84.

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Hence, the true par value of Exchange on England, is 9 per cent. on the nominal base.

324. To find the value of a bill of exchange in sterling money, in United States money.

1. A merchant in New York, wishes to remit to England, a bill of exchange for £125 15s. 6d. : how much must he pay for this bill, when exchange is at 9 per cent. premium?

£125 15s. 6d.
Add 9 per cent.

gives amount in £'s,

= £125.775

11.9486+ £137.7236+

The pounds and decimals of a pound are reduced to dollars, by multiplying by 40 and dividing by 9,-giving, in this case, $612.105 (Art. 2-)

Rule.-I. Reduce the amount of the bill to pounds and decimals of a pound, and then add the premium of exchange.

II. Multiply the result by 40, and divide the product by 9: the quotient will be the answer in United States money.

Examples.

1. A merchant shipped 100 bales of cotton to Liverpool, each weighing 450 pounds. They were sold at 74d. per pound, and the freight and charges amounted to £187 10s. He