The Premium is a certain percentage on the amount of risk. There are different modes of insurance, but all are dependent on the principle of percentage. EXAMPLES. 1. What is the premium on property on which a risk of $6000 is taken, at 1% for one year? 2. What is the premium on a risk of $5000, on which a premium note is given for 5% of the risk, and the interest on the note is 4% ? Note Interest on note If the policy cost is $11.00. 5000 × 100 = $250. 250 × 100 = $10 = Premium. $1.00, the expense for the first year REM.-Sometimes the premium is made to cover both property and premium, in which case the risk is equal to the sum of the value on property and the premium. 3. What amt. must I have insured at 1% prem., to cover property and prem., when the risk on the property is $9950? 5% INTEREST. Interest is an allowance for the use of money. It is reckoned by percentage; thus, 5%, 6%, etc., meaning for a year, when not otherwise expressed; for any other time it is as the ratio of the time; thus, the interest of $100 at 6% is $6 for a year, for two years $12, and for six months $3. PROBLEMS. 1. Find the interest of $150, at 6%, for 1 year. $1.50 × × = 1.50 × = $10.50. COR.-At 6%, the rate per cent. for any number of months is the number of months; thus, for 8 months it is 4%, for 6 months it is 3%, and for 14 months 7%. 2. Find the interest of $150, at 6%, for 129 days? 29 $150 × 8 × H H = $150 × 1 = $3.225. 60 6000 COR.-The interest of a sum of money for any number of days is equal to the product of the sum of money and the number of days divided by 6000; or, if the number of dollars be multiplied by the number of days and this product divided by 6, the quotient is the interest in mills; point off three decimals and it is reduced to dollars, cents, and mills. If the rate of interest is 7%, add ; if 8%, add ; if 9%, add; if 5%, deduct ; if 4%, deduct ; if 3%, take 1. The rate for 200 months is 100%; that is, the interest is equal to the principal. 1. Find the interest of $100 for 1 year, at 6%, 2%, 8%, 9%, 10%, 5%, 4%, 3%, and 2%. For 1 year at 6% it is $6.00 5. What is the interest of $648 at 6% for 3 years 5 REM.-When the denominator is a divisor and is reduced to 10, 100, 1000, etc., it is best not to cancel further, as it is so convenient in use. 6. What is the interest of $540 from Oct. 10th, 1872, 7. What is the interest of $741 at 7% for 1 year 8 months and 20 days? 20 months and 20 days at 6%? 1 year = 360 days. 9 months = 240 days. 20 days. 620 days. |