$500. PHILADELPHIA, Feb. 1, 1875. 2. Three months after date, I promise to pay to J. B Lippincott & Co., or order, five hundred dollars, with interest, without defalcation. Value received. JAMES MONROE. Indorsed as follows: May 1, 1875, $40; Nov. 14, 1875, $8; April 1, 1876, $18; May 1, 1876, $30. What was due Sept. 16, 1876? Int. of $467.50 to Nov. 14, 1875, 6 mo. 13 da. Int. of $467.50 to April 1, 1876, 4 mo. 17 da. Amount due $449.44 3. What was the amount due October 25, 1873, upon a note for $1500, dated New Orleans, April 1, 1872, and on which the following payments were endorsed: June 5, 1872, $300; Oct. 15, 1872, $37.75; May 1, 1873, $97.25; Aug. 6, 1873, $495? $700. DETROIT, Nov. 1, 1873. 4. On demand, I promise to pay Charles Smith, or order, seven hundred dollars, with interest. ceived. Value reABRAHAM ISAACS. Indorsed as follows: Dec. 5, 1873, $75; Jan. 10, 1874, $350; April 11, 1874, $11.25; May 15, 1874, $250. What was due Sept. 1, 1874? $497-3 39 CHICAGO, March 15, 1874. 5. Three months after date, we promise to pay James Kelly, or order, four hundred and ninety-seven with interest at 6%. Value received. dollars, BROWN, NICHOLS & Co. Indorsed as follows: Nov. 3, 1874, $57.50; June 15, 1875, $22.25; Aug. 1, 1875, $125; Sept. 15, 1875, $175. What was due Jan. 1, 1876? 598. The following method of computation is often used by merchants in the settlement of notes and of interest accounts running a year or less; hence called the MERCANTILE RULE: I. Find the amount of the note or debt from its date to the time of settlement. II. Find the amount of each payment from its date to the time of settlement. III. Subtract the sum of the amounts of payments from the amount of the note or debt. An accurate application of this rule requires that the time should be reduced to days, and that the interest should be computed by the rule for days (574). For the Vermont State method of computation, and also of assessing taxes, see pages 227-231. 1. On a note for $600 at 7%, dated Feb. 15, 1874, were the following indorsements: March 25, 1874, $150; June 1, 1874, $75; Oct. 10, 1874, $100. What was due Dec. 31, 1874? OPERATION. Am't of $600 from Feb. 15 to Dec. 31, 319 da., $636.71 2. A note for $950, dated Jan. 25, 1876, payable in 9 mo., at 7% interest, had the following indorsements: March 2, 1876, $225; May 5, 1876, $174.19; June 29, 1876, $187.50; Aug. 1, 1876, $79.15. What was the balance due at the time of its maturity? 3. Payments were made on a debt of $1750, due April 5, 1875, as follows: May 10, 1875, $190; July 1, 1875, $230; Aug. 5, 1875, $645; Oct. 1, 1875, $372. What was due Dec. 31, 1875, interest at 6%? DISCOUNT. 599. Discount is a certain per cent deducted from the price-list of goods, or an allowance made for the payment of a debt or other obligation before it is due. 600. The Present Worth of a debt payable at a future time without interest, is such a sum as, being put at legal interest, will amount to the debt when it becomes due. 601. The True Discount is the difference between the whole debt and the present worth. 602. 1. What is the present worth of a debt of $224, to be paid in 2 yr., at 6%? ANALYSIS.-Since in 2 yr., at 6%, the int. is .12 of the principal, the amt. is 1.12 of it; therefore, $224, the debt, is 1.12, or 11% of the present worth, and 188, or the present worth itself, is $200. Or, since $1.12 is the amt. of $1, $224 is the amt. of as many dollars as $1.12 is contained times in $224, or $200. (578.) What is the present worth 2. Of $315, due in 10 mo., at 6%? WRITTEN EXERCISES. 603. 1. What are the present worth and the true discount, of $362.95, payable in 7 mo. 12 da., at 6%? OPERATION. Amt. of $1, for 7 mo. 12 da., at 6% = $1.037 $1 × 350 350 times. $350, Present Worth. $362.95 $350 $12.95, True Discount. ANALYSIS. Since the amount of $1 for 7 mo. 12 da. at 6% is $1.037 (579), $362.95 is the amount of as many dollars as $1.037 is contained times in $362.95, or 350 times. Hence the present worth is $350; and the true discount is $362.95 – $350, or $12,95. 2. What is the present worth of a debt of $287.75 to be paid in 3 mo. 18 da. at 7%? 3. What is the true discount on debt of $2202.90 due in 8 mo. 12 da. at 7%? RULE.-I. Divide the debt by the amount of $1 for the given rate and time, and the quotient is the present worth. II. Subtract the present worth from the debt, and the remainder is the true discount. FORMULA.-Present Worth = Debt ÷ Amt. of $1. Hence the present worth is the principal of which the true discount is the interest, and the whole debt the amount. 4. Bought a house and lot for $19500 cash, and sold them for $22000, payable one-fourth in cash and the remainder in 1 yr. 6 mo. How much ready money did I gain, computing discount at 6% ? 5. A merchant buys goods for $4200 on 4 mo. credit, but is offered a discount of 3% for cash. If money is worth % a month, what is the difference? 6. Bought a bill of lumber amounting to $3500, on 6 mo. credit; 2 months afterward paid on account $1.500, and 1 month later, $1000. Find the present worth of the balance, at the time of the second payment, int. at 7%. 7. A merchant holds two notes, one for $356.25 due Dec. 1, 1875, and the other for $497.50, due Feb. 1, 1876. What would be due him in cash on both notes Sept. 15, 1875, at 6%? 8. A bookseller bought $300 worth of books at a discount of 334% from list prices, and sold them at the regular retail price, on 6 mo. time. Money being worth 6%, what per cent. profit did he make? |