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CHAPTER XVI

INTEREST

246. Interest. Money paid for the use of money is called interest.

Interest is computed as a certain per cent of the money used. Thus, if a man borrows $500 for a year, at 6%, the interest is 6% of $500, or $30.

247. Principal. Money loaned on which interest is paid is called the principal.

In the example just given, $500 is the principal.

The sum of the principal and interest is called the amount.

248. Rate of Interest. The rate per cent of the principal paid in interest for one year is called the rate of interest.

In the example under § 246, the rate of interest is 6%, and the amount is $500+ $30, or $530.

For example, consider the following:

(1) Find the interest on $840 at 5% for 2 yr. Since the rate is 5% a year,

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(2) Find the interest on $750 at 51% for 3 yr.
Since the rate is 51% a year,

Interest for 1 yr. = 51% of $750 = $41.25.
Interest for 3 yr. = 34 × $41.25 = $144.38.

Therefore, to find the interest, given the principal, rate, and time, multiply the principal by the rate, and the product by the number that expresses the time in years.

EXERCISE 145

Given the principal, rate, and time, find the interest :

1. $100, 6%, 2 yr.

19. $100, 6%, 2 yr.

2. $100, 4%, 3 yr.

20. $100, 5%, 21 yr.

3. $100, 3%, 4 yr.

21.

$200, 6%, 31 yr.

22. $200, 5%, 21 yr.

23.

$375, 6%, 21 yr.

$675, 4%, 3 yr.

$480, 6%, 23 yr.

$540, 6%, 33 yr.

$640, 5%, 23 yr.

$975, 4%, 2 yr.

29.

$975, 5%, 2 yr.

30. $725, 41%, 3 yr.

31. $835, 34%, 2 yr.

4. $200, 6%, 3 yr.

5. $300, 6%, 2 yr.

6. $600, 3%, 2 yr.

7. $250, 6%, 2 yr.

8. $375, 4%, 3 yr.

9. $650, 6%, 5 yr.

10. $275, 5%, 2 yr.

24.

25.

26.

27.

28.

11. $350, 4%, 3 yr.

12. $460, 6%, 2 yr.

13. $525, 5%, 3 yr.

14. $265, 4%, 2 yr.

15. $425, 5%, 3 yr.

16. $635, 6%, 4 yr.

17. $875, 6%, 2 yr.

18. $925, 5%, 5 yr.

37. A man borrowed $250 and agreed to pay 6% interest. He kept the money a year. How much interest did he pay?

32.

$425.50, 6%, 2 yr.

33. $375.75, 6%, 31⁄2 yr. 34.

$420.50, 5%, 21 yr.

35. $2450, 4%, 3 yr.

36. $3575, 5%, 23 yr.

38. A man borrowed $250 and agreed to pay 6% interest. He kept the money two years. How much interest did he pay?

39. How much is the interest on $400 at 6% for 1 yr.? for 2 yr.? for yr.? for 1 yr.? for 2 yr. 6 mo. ?

40. How much is the interest on $600 at 4% for 1 yr.? for 2 yr.? for 6 mo.? for 1 yr. 6 mo.? for 2 yr. 6 mo. ?

41. What is the interest on $200 at 6% for 1 yr.? for 1 mo.? for 2 mo. ? for 7 mo.?

42. What is the interest on $600 at 6% for 1 yr.? for 1 for 3 mo.? for 10 mo. ? for 8 mo.?

mo.

43. What is the interest on $500 at 6% for 2 yr.? for 2 yr.? for 2 yr. 5 mo.? for 2 yr. 7 mo. ?

Given the principal, rate, and time, find the interest :

56.

54. $1200, 1 yr. 7 mo., 6%. 55. $1200, 1 yr. 7 mo., 5%. $1200, 2 yr. 2 mo., 6%. $1500, 2 yr. 2 mo., 6%. $1500, 2 yr. 9 mo., 6%.

57.

58.

44. $300, 2 yr. 5 mo., 4%. 45. $400, 2 yr. 5 mo., 3%. 46. $600, 1 yr. 6 mo., 6%. 47. $600, 1 yr. 8 mo., 6%. 48. $600, 1 yr. 8 mo., 5%. 49. $500, 1 yr. 9 mo., 6%. 50. $600, 1 yr. 9 mo., 5%. 51. $500, 2 yr. 10 mo., 6%. 52. $800, 3 yr. 5 mo., 6%. 53. $900, 2 yr. 3 mo., 5%.

59.

60.

61.

$1800, 3 yr. 2 mo., 6%. $1800, 3 yr. 2 mo., 5%. 63. $2500, 63. $2500, 4 yr. 3 mo., 6%.

62.

64. What is the interest on 6 mo.? for 4 mo. ? for 8 mo. ?

67. If the interest on a how much is it for 1 mo. ?

$1500, 2 yr. 9 mo., 5%. $1800, 3 yr. 8 mo., 6%.

$436, at 6%, for 1 yr.? for for 3 yr. 10 mo. ?

65. What is the interest on $360, at 5%, for 1 yr.? for 6 mo.? for 10 mo. ? for 1 mo. ? for 2 yr. 9 mo. ?

66. If the interest on a certain sum is $93.84 for 1 yr., how much is it for 3 mo.? for 6 mo.? for 1 yr. 9 mo. ? certain sum is $36.48 for 1 yr., for 5 mo. ? for 3 yr. 10 mo. ?

68. What is the interest on $540, at 4%, for 1 yr.? for 1 mo. ? formo.? for 2 mo. ? for 5 mo.?

69. What is the interest on $175.50, at 4%, for 1 yr.? for 6 mo.? for 4 mo.? for 3 mo.? for 1 mo.? for 23 mo.?

249. Interest when the Time involves Days. If the time involves days, we may reduce it to a fraction of a year and proceed as in § 248.

For example, find the interest on $480 for 3 yr. 3 mo. 10 da. at 5%.

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Find the interest on:

18 mo. = mo.

10 of 1 yr. 13 yr.

59 × 5 × $480

18 × 100

EXERCISE 146

It is the custom in computing interest in this way to take 30 da. to the month, or 360 da. to the year, and to find the interest to the nearest cent.

= $78.67.

1. $100, at 6%, for 2 yr. 6 mo.

2. $100, at 6%, for 2 yr. 6 mo. 10 da.

3. $100, at 6%, for 3 yr. 4 mo. 15 da.
4. $200, at 5%, for 3 yr. 4 mo. 20 da.
5. $300, at 5%, for 3 yr. 8 mo. 20 da.
6. $275, at 4%, for 1 yr. 9 mo. 15 da.
7. $375, at 5%, for 2 yr. 9 mo. 15 da.
8. $450, at 6%, for 3 yr. 10 mo. 6 da.
9. $525, at 6%, for 4 yr. 10 mo. 6 da.
10. $675, at 5%, for 2 yr. 3 mo. 10 da.
11. $575, at 5%, for 3 yr. 3 mo. 3 da.
12. $825, at 4%, for 2 yr. 3 mo. 3 da.
13. $1250, at 51%, for 2 yr. 6 mo. 15 da.
14. $1500, at 41%, for 3 yr. 6 mo. 20 da.
15. $2500, at 31%, for 2 yr. 4 mo. 15 da.
16. $3500, at 34%, for 3 yr. 7 mo. 10 da.

250. Difference between Dates. The time between two dates may be found as here shown. For example, required to find the time from April 16, 1914, to February 5, 1919.

Since February is the second month of the year, and April the fourth, the work is arranged as here shown. We then subtract as with other compound numbers ; 5-16 is impossible, but 35 — 16 = 19, Proceeding in the usual manner, the result is 4 yr. 9 mo. 19 da. In such cases allow 30 da. to the month.

yr. mo. da. 1919 2 5 1914 4 16 4 9 19

EXERCISE 147

Find the difference in time between these dates:

1. Sept. 2, 1914, Oct. 15, 1919.

2. Oct. 5, 1914, Jan. 25, 1920. 3. Aug. 7, 1915, June 4, 1921.

4. Nov. 10, 1916, Jan. 5, 1920.

5. Aug. 23, 1915, Jan. 9, 1920.

6. What is the interest on $375 from July 4, 1914, to July 4, 1917, at 6% ?

7. What is the interest on $650 from July 20, 1914, to May 20, 1917, at 5% ?

8. What is the interest on $825 from May 12, 1915, to Feb. 12, 1919, at 41% ?

9. What is the interest on $360 from June 8, 1916, to April 6, 1918, at 6% ?

10. What is the interest on $480 from March 7, 1916, to April 9, 1918, at 5% ?

11. What is the interest on $750 from Nov. 8, 1916, to Feb. 22, 1918, at 5% ?

12. What is the amount of $650 at interest at 6% from Sept. 27, 1915, to March 12, 1918?

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