$779.25

PRINCIPAL AND SURETY NOTE.

TRENTON, N. J., Nov. 15, 1876.

Two months after date, I promise to pay Philip Dunn, or order, Seven Hundred and Seventy-nine Dollars, with interest, for value received, without defaleation or discount. HENRY WOOD.

Surety, PHILIP DUNN.

What will be due on this note at maturity?

3.

JOINT NOTE.

Ans. $787.17.

$650

JEFFERSON CITY, Mo., Aug. 21, 1876.

On demand, for value received, we promise to pay James Mackay, or order, Six Hundred and Fifty Dollars, with interest, negotiable and payable without defalcation or discount. JOHN TOMLINSON, CHARLES LEROY.

What will be due on this note, Jan. 1, 1877, reckoning 3 da. of grace? Ans. $664.41.

4.

$727.75

JOINT AND SEVERAL NOTE.

NEW YORK, Sept. 25, 1876.

Six months after date, we jointly and severally promise to pay Matthew Wilcox, or order, Seven Hundred and Twenty-seven Dollars with interest, value received.

SAMUEL MORGAN,

RICHARD J. MENDENHALL.

What will be due on this note at maturity?

5.
$480

Ans. $749 70.

COMPANY NOTE PAYABLE AT A BANK.

PHILADELPHIA, April 1, 1876. Ninety days after date we promise to pay Claxton & Co., or order, at the National Bank of Northern Liberties, Four Hundred and Eighty Dollars, for value received, without de falcation. WILLIAMS, FRENCH & Co. What was the value of this note, August 12, 1876?

Ans. $483.44.

6.

$600.

READING, PA., Dec. 14, 1887.

Three months after date, I promise to pay Mary Smith, or or der, at the First National Bank, Six Hundred Dollars, with inter. est, for value received, without defalcation.

JOHN SMITH.

What was the value of this note at maturity? Ans. $609.10.

ANNUAL INTEREST.

488. Annual Interest is the simple interest of the prin cipal, and of each year's interest from the time of its accruing until settlement.

489. Annual Interest is sanctioned by some States when the note is written "with interest payable annually."

1. Simple Interest is not due, and cannot be collected until the principal is due, unless the note reads, "with interest payable annually." Annual Interest allows interest on the unpaid interest of a debt as well as upon the debt itself.

2. In Compound Interest, each year's interest is added to the principal, and the sum forms a new principal for the succeeding year.

3. The neglect to collect the annual interest on a note drawn "with interest payable annually," is in some States, regarded as a waiving of the contract requiring it.

1. What is the amount due on a note of $300, at 6% 'for 3 yr. 3 mo., interest payable annually?

SOLUTION.-The interest on $300 for one year is $18, and for 3 yr. 3 mo. is $58.50; the first year's interest is on interest 2 yr. 3 mo., giving $2.43 interest; the second year's is on interest for 1 yr. 3 mo., amounting to $1.35; the third year's interest is on interest 3 mo., amounting to $.27; adding the

interest on the principal, the interest on each year's interest, and the principal, we have $362.55 as the amount due.

Rule.-I. Find the interest on the principal for the given time and rate: also find the interest on each year's interest for the time it has remained unpaid.

II. The sum of these interests will be the annual interest, and this, added to the principal, will be the amount due.

NOTE.-The work may be shortened by calculating the interest for the sum of the times during which the different interests remain unpaid.

WRITTEN EXERCISES.

2. What is the interest due on a note for $840, dated March 2, 1872, interest payable annually, if no payments are made till Sept. 9, 1876 ? Ans. $252.90.

3. How much is due Jan. 1, 1877, on a note for $1000, dated June 16, 1873, interest payable annually at 7%, if the yearly interest has been regularly paid? Ans. $1038.69

4. $1250. For value received, I promise to pay to the order of Jacob Clark, on demand, One Thousand Two Hundred and Fifty Dollars, with interest annually. THOMAS MAYNARD.

CONCORD, N. H., Feb. 10, 1871.

What was due on this note, June 11, 1875, if the annual interest was paid up for the first two years?

PARTIAL PAYMENTS.

Ans. $1432.73.

490. Partial Payments are payments in part of notes or other obligations bearing interest.

491. An Indorsement is an acknowledgment of a payment written on the back of the obligation, stating the time and amount of the payment.

The term Indorsement is used in different business papers, in each case, however, meaning a writing on the back, from the Latin dorsum, the back. 1. The writing of the name on the back of a check, draft, note, etc., is called a General Indorsement. or an indorsement in blank.

2. A Special Indorsement directs the obligation to be paid to some par ticular person, or to his order.

3. An acknowledgment of the payments on a note, written on the back of it, is also an indorsement. The person holding the obligation signs his name to this statement as a receipt.

492. The Supreme Court of the United States, and nearly all the States, adopt the following rule for partial payments, called

THE UNITED STATES RULE.

I. Find the amount of the principal to the time of the first payment; if the payment equals or excecds the inter est, subtract the payment from the amount and treat the remainder as a new principal.

II. If the payment is less than the interest, find the amount of the same principal to the time when the sum of the payments shall equal or exceed the interest due, and subtract the sum of the payments from the amount.

III. Proceed in the same manner with the remaining payments until the time of settlement.

NOTE. This rule is founded upon the decision of Chancellor Kent. The principle is, that neither interest nor payment shall draw interest. It has been adopted by nearly all the States-New Hampshire, Vermont, and Connecticut being the principal exceptions.

1. $600

MILLERSVILLE, PA., July 12, 1870. Four years after date, I promise to pay Henry Wilson, or order, Six Hundred Dollars, with interest, for value received. CHARLES HARDING.

On this note were the following indorsements:

Balance due after first payment

ment being less, is not deducted.

Interest from first payment to third payment

Amount due Sept. 12, 1873

Interest on balance to second payment is $47.00. The pay

Sum of second and third payments to be deducted.

$600.00

31.20

631.20

131.20

500.00

69.00

569.00

215.00

354.00

17.70

371.70

Balance due on settlement, July 12, 1874

2. $4000

LANCASTER, PA., May 10, 1870.

Five years after date, for value received, I promise to pay Robert Turner, or order, Four Thousand Dollars, with interest from date. MORTON BLACK, Jun.

Indorsements: May 10, 1871, $300; May 22, 1872, $250; June 16, 1873,

$70; July 30, 1874, $175.

How much was due May 10, 1875?

Ans. $4389.58.

8. $800.

COLUMBIA, PA., March 10, 1870.

For value received, on demand, I promise to pay W. A. Fisher, Eight Hundred Dollars, with interest.

W. H. CROTHERS.

Indorsements: Feb. 16, 1871, $10.00; Oct. 20, 1871, $75.00; Jan. 14 1872, $15.00; April 26, 1872, $10.00.

The note was settled Sept. 1, 1872; what was then due ? Ans. $808.25.

4. A note of $7000 was given Jan. 1, 1872. Indorsements: May 3, 1873, $400; Aug. 8, 1874, $70; Sept. 9, 1875, $120; Oct. 7, 1876, $950.

What was due Jan. 1, 1877, Int. 7%?

Ans. $7910.

5. A note of $5860 was given Sept. 10, 1874.

Indorsements: Aug. 16, 1875, $150; May 18, 1876, $350; Dec. 28, 1877, $95; Nov. 17, 1878, $112.

What was due Jan. 1, 1879, Int. 5%?

Ans. $6414.66.

6. A note of $3500 was given May 12, 1870.

Indorsements: Jan. 16, 1871, $50; July 10, 1871, $25; Dec. 18, 1871, $250; June 20, 1872, $475; Aug. 20, 1873, $75; Sept.

30, 1873, $35.

What was due Jan. 1, 1874, Int. 6% ? Ans. $3320.72.

493. Business men generally settle notes and interest accounts, payable within a year, by the following rule, called the

MERCHANTS' RULE.

I. Find the amount of the principal to the time of settle ment, and also the amount of each payment to the time of settlement.

II. Subtract the sum of the amounts of the payments from the amount of the principal, for the balance due.

NOTES.-1. In some States merchants apply this rule to notes for longer periods by reckoning the interest for 1 year, and subtracting from the amount the amounts of the payments made during the year, and taking this balance for a new principal.

2. As the periods in these notes are all short, the interest should be cal sulated for the number of days.

1. $5480.

PHILADELPHIA, Jan. 1, 1875.

Sixty days after date, for value received, I promise to