EXERCISES (Written). 400. What is the compound interest of : 1. $650 for 2 yr., at 6% ? 2. $600 for 2 yr., at 5% ? 3. $600 for 3 yr., at 8% ? 4. $500 for 5 yr., at 4 % ? Find the amount, at compound interest, of: 5. $400 for 2 yr., at 10 %. Find the compound interest of: 7. $240 for 2 yr. 6 mo., at 8%. 12. $800 for 3 yr. 6 mo. 24 da., at 6 %. 13. If interest be compounded semi-annually, what will be the amount of $450 for 2 yr. 3 mo., at 8% ? Compound interest may be readily computed by using the following compound interest table, page 226. 14. Find the amount at compound interest of $500 for 6 yr., at 5%. SOLUTION.-By the table we find that the amount, at compound interest, of $1 for 6 yr., at 5 %, is $1.340096; therefore the amount of $500, for the same time and rate, is 500 x $1.340096 = $670.05. 15. Find by the table the compound interest of $524 for 3 yr. 6 mo., at $8 %, interest payable semi-annually. 16. Find the compound interest of $800 for 2 yr. 3 mo. 15 da., at 7%. SOLUTION. $1.1449 Amount of $1 for 2 yr. at 7 %. .02337 Int. of $1.1449 for 3 mo. 15 da. at 7%. Find by the table the compound interest of: 18. $360 for 3 yr. 3 mo. at 5 %. 19. $650 for 3 yr. 4 mo. 12 da. at 6 %. 20. $889.37 for 6 yr. 9 mo. 21 da. at 7%. 21. To what will $450 amount in 2 yr., at 8%, if the interest be compounded semi-annually. 22. To what will $735.60 amount in 2 yr. 5 mo. 24 da., at 8%, if the interest be compounded quarterly? 23. What principal, at 7% compound interest, will amount to $52.432 in 4 years? SOLUTION. I find from the table that the compound amount of $1 for the given time and rate is $1.310796; hence the required principal is as many dollars as $1.310796 is contained times in $52.432, or $40. 24. What principal, at 6% compound interest, will produce $2370 in 10 years? 25. What sum will amount to $640.405 in 6 yr., at 8%, compounded semi-annually? 226 COMPOUND INTEREST TABLE. 401. Amount of $1, at various rates, compound int. from 1 to 20 periods of time. 3 per cent. 4 per cent. 5 per cent. 6 per cent. 1.060000 1.050625 1.060900 1.071225 1.102500 1.081600 1.123600 1.076891 1.092727 1.108718 1.124864 1.157625 1.191016 1.103813 1.125509 1.147523 1.169859 1.215506 1.262477 1.131408 1.159274 1.187686 1.216653 1.276282 1.338226 1.340096 1.418519 7 1.188686 1.229874 1.272279 1.407100 1.315932 1.503630 8 1.218403 1.266770 1.316809 1.368569 1.477455 1.593848 9 1.248863 1.304773 1.362897 1.423312 1.551328 1.689479 10 1.280085 1.343916 1.410599 1.480244 1.628895 1.790848 1.710339 1.898299 12 1.344889 1.425761 1.511069 13 1.378511 1.468534 1.563956 1.795856 1.601032 1.885649 1.665074 2.012197 2.132928 14 1.412974 1.512590 15 1.448298 1.557967 1.731676 1.618695 1.800944 1.675349 1.979932 2.260904 2.078928 2.396558 1.872981 1.733986 2.182875 2.540352 17 1.521618 1.652848 1.947901 1.794676 2.292018 2.692773 18 1.559659 1.702433 1.857489 2.025817 2.406619 2.854339 19 1.598650 1.753506 1.922501 2.106849 2.526950 3.025600 20 1.638616 1.806111 1.989789 2.191123 2.653298 3.207136 2 1.144900 1.166400 1.188100 1.210000 1.232100 1.254400 3 1.225043 1.269712 1.295029 1.331000 1.367631 1.404908 1.310796 1.360489 1.411582 1.464100 1.518070 1.573519 1.402552 1.469328 1.538624 1.685058 1.610510 1.762342 1.771561 1.870414 1.973822 1.605781 1.713824 1.828039 1.948717 2.076160 2.210681 1.718186 1.850930 2.143589 1.992563 2.304537 2.475963 1.838459 1.999005 2.357948 2.171893 2.558036 2.773078 1.967151 2.158925 2.367364 2.593742 2.839420 3.105848 2.853117 2.580426 2.518170 3.138428 2.812665 3.498450 3.895975 2.719624 3.452271 3.065805 3.883279 4.363492 14 2.578534 2.937194 3.797498 3.341727 4.310440 4.887111 15 2.759031 3.172169 4.177248 4.784588 5.473565 4.315701 5.141661 7.263342 6.115909 8.612760 20 3.869684 4.660957 5.604411 9.646291 8.062309 6.727500 Annual Interest. 402. Annual interest is simple interest on the principal, and on each year's interest of the principal, to the time of settlement. To compute annual interest. 1. Find the annual interest and amount of $500 for 4 yr. at 8%. SOLUTION.-The annual int. is $40, the first of which will draw int. 3 yr.; the second 2 yr.; the third 1 yr. 2. What is the annual interest of $450 for 5 yr. at 8% ? RULE. Compute the interest on the principal for the given time and rate, to which add the interest on each year's interest, for the time it has remained unpaid. To obtain the latter, multiply the interest on each year's interest by one-half the product of the number of years by that number less one. EXERCISES (Written). 403. 1. What will $3450 amount to in 10 yr. at 6%, annual interest? 2. What is the annual interest of $40.50 for 3 yr. at 4% ? For 5 yr. at 5%? For 8 yr. at 6% ? For 15 yr. at 8% ? 3. What is the difference between the annual interest and the compound interest of $1240 for 4 yr. at 7% ? $475. 4. What amount will be due on the following note at maturity? NEW ORLEANS, LA., July 2, 1901. Five years after date, for value received, I promise to pay J. S. Richardson, or order, Four hundred seventy-five Dollars, with interest at seven per cent, payable annually. WILLIAM G. JONES. DISCOUNT. 404. Discount is the sum deducted from a debt or price. There are three kinds of discount, viz.: Commercial discount, true discount, and bank discount. Commercial Discount. 405. Commercial discount is a deduction from the price or value of a commodity. Manufacturers and wholesale dealers generally have fixed price-lists of their goods, and when the market varies, instead of changing these prices, they change the rate of discount. The fixed price is called the list price. The term "30 and 10 off," or "a discount of 30% and 10%," means that 30% is first deducted, leaving 70% of the price, from which a deduction of 10% is made, leaving a remainder of 63% of the price. Hence, "30 and 10 off" is equivalent to a single deduction of 37%. The term " and 12% off" means a deduction of of the price, and then a deduction of 12% from the remainder. The amount of a bill less the discounts is called the net amount. |