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a

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3288.60
3240.00

$48.60 = paid for a draft of $3240. 48.60

13 The rate is

reduce by 32.4 = 3240.00

= 13%; the

100 result will be the same if reduced to a decimal ;. thus,

= 100 ) 1.5000 (.015 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.

1.5 100

63

010

=

2010

5. What is the cost of a 60 day draft on New York for $5480, at 3% premium, interest off at 6%? Discount %

. Premium 3%

. Discount above premium

1% of $5480 54.80. 3% of $5480

27.40 $5480.00 36% of $5480 2.74

30.14 Discount = $30.14 $5449.86, Cost.

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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%? To = $5;

188 = $500, Ans.

a

100

FOREIGN EXCHANGE.

EXAMPLES.

1. What is the cost in New York of a draft on Lon

a don for £346 15s. 6d., at 8% premium ?

158. 6d.

12 ) 6d. 20 ) 15.5

.775

12

=

21

= .775.

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8

109.3 5 6 £$46.175 x 40 x 108 = 109.355 X 8 X 3 = $2624.52.

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2. What amount of debt in London may be paid by depositing $5000 in New York, rate of exchange 8% in favor of London ?

125

2 5

$000 xx 18 = 125 x.

= £1041 13s. 4d.

12
3

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 £?

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5. What is the value in Paris of $5000 in New York exchange $4.85 = £1, and £1 = 25.20 francs ?

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6. What sum in New York will pay 2597937 francs in Paris, exchange as in 5th ?

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7. What is the value in Hamburg of $5000 in New York, when $4.80 = £1, £1 = 25.20 francs, and 1.80

1= francs =1 mark banco ?

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8. What sum in New York will pay 145831 mark banco in Hamburg, exchange as above?

145833 x 18 x = $5000.

9. What debt in St. Petersburg will $5000 in New York pay, when $1.80 = £1 in London, £1 = 25.20f. in

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Paris, 4f. = 1 thaler in Dantzic, and i thaler = 2.60 roubles ?

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These problems may be solved by compound equations and ratios.

10. What sum in New York will pay 170624 roubles in St. Petersburg, exchange as above?

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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 New York; in St. Louis a draft on New York costs 11% premium, whilst New Orleans funds can be bought at 11% premium, and at New Orleans Havana funds are 3% 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

x 8 = $5075. X

25

203

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And $$$$Ø x x 488 x 8 = $4974.223

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12. What is $4974.2217 in St. Louis worth in New York by the circuitous method ?

4974.2211 x 489 89 48% = $5000.

X

I have not given a table of foreign values, as they are not permanent. The principle is the same in all cases.

REM. 1.-In the ratios, see that the decimals in the numerator and denominator are equal, and then they are like quantities and can be used as such.

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REM. 2.-When any thing is purchased at a premium, the ratio of the cost is increasing; as, at 3% premium, the ratio is 10%; purchased at a discount the ratio of the cost is diminishing ; as, at 3% discount, the ratio is 10%; hence, if I purchase a draft for $100 at 3% premium, the cost is $100 x 18% $103 ; and if I purchase a draft for $100 at 3% discount, the cost is $100 x 100 $97.

97

COR. 1.-The cost of a draft, when at a premium, is its face multiplied by an increasing ratio whose denominator is 100 and numerator 100 increased by the premium.

Cor. 2.-When there is a discount, the cost of a draft is its face multiplied by a diminishing ratio whose denominator is 100 and numerator 100 diminished by the discount.

REM.-Reckoning by the old par value, £1 is equal 40 dollars, and $1 equal £17. The par value of £1 is now fixed by Act of Congress at $4.8665.

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