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348. A Note, or Promissory Note, is a written promise to pay a sum of money at a given time.
349. The Maker or Drawer is the person who signs the note.
350, The Payee is the person to whom it is made payable.
351. The Holder is the person who has the note in his possession.
352. The Indorser is the person who writes his name upon the back of the note to transfer it or guarantee its payment.
The payee may indorse by writing his name on the back of a note. It is then payable to the bearer. He may also indorse by writing, “Pay to A- B-, or order.” It then requires the signature of A-B- before it is payable.
353. The Face of a note is the sum named in it.
354. A Negotiable Note is a note payable to the order of the payee or bearer.
355. A Non-negotiable Note is a note payable to the payee only.
Notes should contain: the date, the time when due, the amount of the note written in words, the words "for value received,” and “with interest," if such is the contract.
356. Three Days of Grace are usually allowed after the specified time, before the note is said to mature or be due, except on notes payable on demand, and where the words “ without grace” are written.
If, when a note is unpaid at its maturity, the holder fails to notify the indorsers of the fact, they are released from responsibility regarding its payment.
357. Notes without interest draw interest at the legal rate after they become due, but a note does not draw interest until after it is due, unless the words “ with interest," or “with use," are written in it.
FORMS OF NEGOTIABLE NOTES.
CINCINNATI, O., Oct. 5, 1876. For value received, two months after date I promise to pay James J. Cone, or order, Seven Hundred Twenty-Nine 18. Dollars, with interest.
H. B. BUCKHAM.
DETROIT, Jan. 29, 1877. For value received, three months after date I promise to pay H. G. Burlingame, ʻor bearer", Six Hundred Dollars.
W. H. SARGENT.
1. Write a negotiable note for $500.25, making yourself the payee, and James J. Rogers the maker. Interest at the legal rate.
2. Write a non-negotiable note for $315.17, making W. R. Howard the payee, payable on demand without interest.
3. Write two forms of negotiabie notes for $3184.25, due in three months to James P. Hermann, with interest.
4. Indorse theni properly for transferring; one to bearer, and the other to H. H. Hurd, or order.
5. Write a note from the following data: Face, $5000; negotiable; maker, P. G. Sloane; payee, J. S. Orton; payable on demand; rate of interest, the legal rate.
358. Discount is an allowance, or deduction, made from a sum of money to be paid.
Problems in discount may, or may not, have reference to time.
359., Commercial Discount is a deduction from the price of an article, or from a bill, without regard to time.
360. The Net Price is the selling price, minus the discount.
361. The Cash Value of a bill, is its face less the discount,
362. 1. If gloves marked at $1.50 per pair, are sold at 10% discount, what is the discount? What is the net price?
2. If flour is offered at $7.50 per barrel, with a discount of 5% for cash, what is the discount?
3. Find the value of a bill of goods, amounting to $845 at 5% discount.
4. Find the value of a bill of goods amounting to $680, when a discount of 21% is allowed for cash.
5. What is the cash value of a bill of goods, amounting to $3215.45 at 20% discount, and 5% off for cash ?
In problems like No. 5, it is always understood that the per cent. of for cash is to be reckoned upon the price after the previous discounts have been allowed.
6. What is the cash value of a bill amounting to $3750 at 10% discount, and 24% off for cash?
7. What is the cash value of a bill of goods amounting to $2157.25 at 15% discount, and 3% off for cash ?
363. 1. What will be the amount of $100 in 1 year, interest at 6%? In 2 years? In 3 years? In 4 years ?
2. What is the value now of $106, to be paid in 1 yr., when money loans at 6%? Of $112, to be paid in 2 yr.?
3. What is the value now of $212, to be paid in 1 yr., money loaning at 6%? Of $224, to be paid in 2 yr.?
4. What is the worth now of a debt of $535, to be paid in 1 yr., when money can be loaned at 7%?
5. What is the present value of $672, due in 11 yr., when money is loaning at 8%? Of $316, due in 2 yr., money being worth 8%?
364. True Discount is a deduction made for the payment of a sum of money before it is due.
365. The Present Worth of a sum of money due at some future time, is a sum which, put at interest at the specified rate, will amount to the debt when it becomes due.
366. 1. What sum of ready money is equivalent to $781.25, payable in 2 years, when money is worth 7%?
ANALYSIS.Since $1.14= Amount of $1 for 2 yr.
every dollar if put at
interest now $784.25:- 1.14=$687.94.
would amount to $1.14 $687.94= Present Worth.
in 2 years, it will re$784.25—$687.94= $96.31 Discount. quire as many dollars
now, to amount to $784.25 in 2 years, as $1.14 is contained times in $784.25, which is 687.94 times. Therefore, the present worth is $687.94.
The face of the debt, $784.25 —$687.94, leaves $96.31, the discount, RULE.—Divide the amount due by the amount of $1, for the given time and rate, and the quotient will be the present worth.
Subtract the present worth from the amount due, and the remainder will be the true discount.
What are the present worth and discount of the following: 2. $975.50, payable in 11 years, when money is worth 6%? 3. $845.20, payable in 14 years, when money is worth 7%? 4. $958.75, payable in 3 years, when money is worth 7%? 5. $576.25, payable in 3 years, when money is worth 8%?
6. $8575, payable in 2 yr. 3 mo. 10 da., when money is worth 5%?
7. $4274, payable in 1 yr. 4 mo. 15 da., when money is worth 6%?
8. $2815, payable in 3 yr. 6 mo. 15 da., when money is worth 7%?
9. $1752.75, payable in 1 yr. 3 mo. 20 da., when money is worth 8%?
10. $5493.50, payable in 2 yr. 5 mo. 25 da., when money is worth 9%?
11. $3457.84, payable in 7 mo. 10 da., when money is worth 71%?
12. Bought a farm for $14500 cash, and sold it for $16000, payable one-half cash and the remainder in one year. To what amount of cash in hand was the selling price equal when money was loaning at 6% ?
13. A merchant bought a bill of goods amounting to $5275, on 3 mo. credit, but was offered 21% discount for cash. How much would he gain by paying cash, money being worth 8%?
14. A merchant holds two notes, one for $187.25, due Feb. 15th, 1877, and the other for $382.75, due April 1st, 1877. What would be due him in cash, on both notes, Jan. 1st, 1877, money being worth 8%?