DOMESTIC EXCHANGE. PROBLEM. To find the cost of a draft on Philadelphia or New York, or any distant city, when at a premium and when at a discount; thus, if the premium is 1%, the draft will cost 181 of its face, which is the sum to be paid ; when at a discount of 1%, it will cost u of its face. EXAMPLES. 1. What is the cost of a draft on Philadelphia for $3024, at 1% premium ? X001 100 15.12 2. What is the cost of a draft on New Orleans for $5000, at 1% discount? 3% of $5000 $25. = 3. What will this draft cost if drawn at thirty days, interest at 6%? 3 days grace must be allowed. 3 = 1+1 글 i = rate per cent; 5000 x 1 = $52.50. The interest and discount must be reckoned on the face. $5000 $52.50 = $4947.50. 4. My agent had in his possession $3288.60, which I directed him to remit; the draft received was $3240; what was the rate of exchange? 3288.60 $48.60 = paid for a draft of $3240. 48.60 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 = 1.5 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 is the numerator, and the amount on the face of the draft the denominator of the fraction. 63% 6070 5. What is the cost of a 60 day draft on New York for $5480, at 1% premium, interest off at 6%? Discount 21%. 1% of $5480 54.80. 30.14 Discount = $30.14 $5449.86, Cost. = = 6. What is the face of a draft which cost $1007.50, at 1% 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; = $500, Ans. 100 FOREIGN EXCHANGE. EXAMPLES. 1. What is the cost in New Ycrk of a draft on London for £346 15s. 6d., at 8% premium ? 109.355 8 £$46.77$ 18 = 109.355 X 8 X3 = = $2624.52. 12 54631 = 21,71 4 and $ 2. What amount of debt in London may be paid by depositing $5000 in New York, rate of exchange 8% in favor of London ? 18 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 ? 1000 $50த்த x 25.20 = 2630000 $4.8$ .97 6. What sum in New York will pay 2597937 francs in Paris, exchange as in 5th ? %. 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 ? $$900 x x = 1250x2x3 = 145831 mark banco. P 18 . 8. What sum in New York will pay 14583} mark banco in Hamburg, exchange as above? 9. What debt in St. Petersburg will $5000 in New York pay, when $1.80 = £1 in London, £1 = 25.20f. in Paris, 4f. = 1 thaler in Dantzic, and 1 thaler = 2.60 roubles ? These problems may be solved by compound equations and ratios. 10. What sum in New York will pay 17062roubles in St. Petersburg, exchange as above ? REM.—This circuitous system of Foreign Exchange has led us into the same thing in our own country when it is found to be advantageous; thus, 11. A merchant in St. Louis has a bill of $5000 to pay in few York; in St. Louis a draft on New York costs 13% premium, whilst New Orleans funds can be bought at 11% premium, and at New Orleans Havana funds are 1% discount; and at Havana, New York funds are at a discount of 14%. What sum in St. Louis will pay the bill by the direct and by the circuitous method ? Xørt Direct, $$$$$ x $5075. 40 25 And $$$$$ x x H88 x = $4974.2217. |