3288.60 $48.60 = paid for a draft of $3240. 48.69 11 The rate is reduce by 32.4 = 3240.00 = 11%; the 100 result will be the same if reduced to a decimal ; thus, = 100 ) 1.5000 (.015 REM.—The ratio of the face of the draft and the premium paid on it, reduced to a fraction whose denominator is 100, will be the rate per cent of the draft; the same result is obtained by reducing the fraction to a decimal. The premium the numerator, and the amount on the face of the draft the denominator of the fraction. 1.5 10 18%. 5. What is the cost of a 60 day draft on New York for $5480, at 3% premium, interest off at 6%? Discount 21%. 1% of $5480 54.80. 27.40 $5480.00 26% of $5480 2.74 30.14 Discount = $30.14 $5449.86, Cost. = 6. What is the face of a draft which cost $1007.50, at *% premium ? 7. What is the face of a draft that cost $992.50, at % discount? 8. What is the face of a draft on which $5 premium is paid, and the rate 1%? Ito = $5; 188 = $500, Ans. FOREIGN EXCHANGE. EXAMPLES. 1. What is the cost in New Ycrk of a draft on London for £346 15s. 6d., at 8% premium ? £$46.77$ * * * = 109.355 X 8 X3 = $2624.52. 3 2% 25 12 54634 = 21.841 x * x*8= $2624.52. 2. What amount of debt in London may be paid by depositing $5000 in New York, rate of exchange 8% in favor of London ? 1 2 5 $800 x 25 Tax = 125 x = £1041 13s. 4d. 3. What is the cost of a draft on London for £546.775 in New York, exchange $4.88 to the £? 546.775 X 4.88 = $2668.262. 4. What will a draft on London for £1041 13s. 4d. cost in New York, exchange $4.80 to the £? 5. What is the value in Paris of $5000 in New York exchange $4.85 = £1, and £1 = 25.20 francs ? 6. What sum in New York will pay 2597937 francs in Paris, exchange as in 5th ? 2597937 x 22 7. What is the value in Hamburg of $5000 in New York, when $4.80 = £1, £1 = 25.20 francs, and 1.80 francs =1 mark banco ? 8. What sum in New York will pay 145831 mark banco in Hamburg, exchange as above? 145833 x 18 x 4 = $5000. 9. What debt in St. Petersburg will $5000 in New York pay, when $4.80 = £1 in London, £1 = 25.20f. in Paris, 4f. = 1 thaler in Dantzic, and i thaler = 2.60 roubles ? These problems may be solved by compound equations and ratios. 10. What sum in New York will pay 170621 roubles in St. Petersburg, exchange as above ? REM.—This circuitous system of Foreign Exchange has led us into the same thing in our own country when it is found to be advantageous; thus, 11. A merchant in St. Louis has a bill of $5000 to pay in New York; in St. Louis a draft on New York costs 11% premium, whilst New Orleans funds can be bought at 11% premium, and at New Orleans Harana funds are 1% discount; and at Havana, New York funds are at a discount of 14%. What sum in St. Louis will pay the bill by the direct and by the circuitous method ? xør: Direct, $50As x 8 = $5075. 100 25 Х 2 0 3 And $$$$$ x 8 x 18 x = $4974.224. 12. What is $4974.2211 in St. Louis worth in New York by the circuitous method ? 4974.2217 x 48% x 488 x 48% = $5000. I have not given a table of foreign values, as they are not permanent. The principle is the same in all cases. REM. 1.-In the ratios, see that the decimals in the numerator and denominator are equal, and then they are like quantities and can be used as such. if REM. 2.-When any thing is purchased at a premium, the ratio of the cost is increasing; as, at 3% premium, the ratio is 10%; purchased at a discount the ratio of the cost is diminishing ; as, at 3% discount, the ratio is 10%; hence, if I purchase a draft for $100 at 3% premium, the cost is $100 x 18% $103 ; and if I purchase a draft for $100 at 3% discount, the cost is $100 x 100 $97. COR. 1.- The cost of a draft, when at a premium, is its face multiplied by an increasing ratio whose denominator is 100 and numerator 100 increased by the premium. Cor. 2.-When there is a discount, the cost of a draft is its face multiplied by a diminishing ratio whose denominator is 100 and numerator 100 diminished by the discount. REM.-Reckoning by the old par value, £1 is equal 40 dollars, and $1 equal £17. The par value of £1 is now fixed by Act of Congress at $4.8665. |