11. A merchant in Mobile bought a draft on New York at 1% premium for $ 1175.64. What was the face of the draft ? 12. A man in Trenton bought a draft on Richmond at 15% discount, for $ 447.183. What was the face of the draft ? 13. What must be paid for a draft of $ 1000, on Hartford, at 30 days, interest at 6%, when exchange is at 2% premium ? $1 X 1.02 = $ 1:02 Solution. — The cost of $ 1 at % 1.02 X 1000 = $ 1020 sight at 2 % premium is $ 1.02, $ 1000 x 0.0055 = $5.50 and of $ 1000 is $ 1020. As $ 1020 – $ 5.50 = $ 1014.50 the draft has 33 days to run, interest at the given rate for that time, amounting to $5.50, must be deducted ; and the proceeds, $ 1014.50, will be the cost of the draft. 14. What must be paid for a draft of $ 1500, at 60 days, at 7 %, exchange being at 1 % discount? 15. I wish to obtain a draft on Boston for $ 3000, at 60 days, interest at 6%, exchange being at 1% premium. What must I pay for it ? 16. What is the face of a 30 days' draft, at 2% premium, which can be bought for $ 2029, interest at 6% ? Solution. $ 1 + $0.02 = $ 1.02, cost of $ 1 at sight. $1 X 0.0055 = $ 0.0055, int. of $ 1 for 33 days. 17. How large a draft on Philadelphia, at par, at 30 days, can be bought for $ 3978, interest 6% ? 18. What is the face of a 60 days' draft at 1 % discount, which can be bought for $ 491.37), money being worth 7 % ? 19. How large a 30 days' draft can I buy for $ 2998.50, interest at 6%, and exchange at 1% premium ? FOREIGN EXCHANGE. 324. Foreign Exchange is between persons in different countries. In foreign exchange drafts or bills are expressed in the money of the country in which they are payable. 325. English or Sterling Money is expressed in pounds, shillings, pence, and farthings. 327. French Money is expressed in francs and centimes; a franc being 100 centimes. A franc has the value of $0.193, and about 5.18 francs are equivalent to a dollar. 328. The Money of the German Empire is expressed in marks (reichmarken) and pennies (pfennige); a mark being 100 pennies. A mark is equivalent to $ 0.238, and 4 marks are about 95 cents. NOTE. — For the value of other foreign coins as fixed by the U. S. government refer to the table in the Appendix. 329: Sterling Bills, or drafts on England, Ireland, and Scotland, are quoted at the exchange value of a sovereign or pound sterling in United States dollars. Exchange on Paris, Antwerp, and Geneva is quoted at a certain number of francs per dollar; and on Bremen, Hamburg, Frankfort, and Berlin at a certain number of cents per 4 reichsmarks. Thus, Foreign exchange may be quoted as follows; Sterling sight 4.861 @ 4.87, 60 days 4.85; Francs sight 5.18 @ 5.18], 60 days 5.15 @ 5.154; and Reichsmarks sight 941 @ 943, 60 days 93} @ 94). 330. Bills of exchange, or drafts, on foreign countries are usually made in sets of three of the same tenor and date, named first, second, and third of exchange. Any one of the set being paid, the others are void. 20. Find the cost in Boston of the following bill drawn on London, exchange at 4.85. £160 85. Boston, Dec. 15, 1881. At sight of this First of Exchange, second and third of the same date and tenor unpaid, pay to the order of Samuel W. Walher one hundred sixty pounds eight shillings sterling, value received, and charge the same to account of Hidder, Peabody, g Co. To Messrs. Manson & Clews, London, England. Solution. — £160 88. = £160.4; $ 4.85 X 160.4 = $777.94. 21. When exchange on London is at 4.85, what will be the face of a draft that can be bought for $ 777.94 ? 22. Bought a set of exchange on England for £ 1320 108. at 4.877. What was the cost ? 23. Find the value in New York of a set of exchange on Paris for 2380 francs at 5.15. 24. Andrew Taylor, of Providence, wishes to remit 1500 francs to Antwerp. What will be the cost of a draft for that sum, exchange at 5.19? 25. When exchange on Paris is 5.20, how many francs of exchange will $ 3195 buy ? 26. How much must be paid for a set of exchange on Hamburg for 1304 reichsmarks, exchange at 95 ? 27. When exchange on Berlin is 95}, what must be the face of a draft that $ 1420.20 will purchase ? 28. Find the cost of a set of exchange on London at 60 days for £1254 15s. 6d., exchange being quoted at 4.87}. 29. What will be the face of a draft in francs that can be bought for $ 1042.50, exchange being 5.211? QUESTIONS. 316. What is a draft ? 317. Who is the drawer? The drawee ? The payee ? 318. What is a sight draft ? 319. A time draft ? 321. How is a draft accepted ? 322. How many days' grace are usually allowed on time drafts ? 322. What is exchange ? 323. Domestic exchange ? 324. What is foreign exchange ? 325. How is English money expressed ? Recite the table. 326. What is the value of a pound or sovereign ? . 327. How is French money expressed ? What is the value of a franc ? 328. What is the money of the German Empire ? What is the value of a mark ? 329. How is exchange on London quoted ? On Paris, Antwerp, and Switzerland ? On Bremen, Hamburg, Frankfort, and Berlin ? 330. How are drafts on foreign countries usually made ? AVERAGE OF PAYMENTS. 331. 1. How long should $ 1 be kept to equal the use of $2 for 1 month ? 2. In how many months will the interest of $6 balance the interest of $18 for 4 months at the same rate per cent ? Solution. - $ 6 being but of $ 18 will require three times as many months to gain as much interest as $ 18 at the same rate, or 3 x 4 months, or 12 mionths. 3. The interest of $15 for 2 months is balanced by the interest of $1 in how many months ? Of $3? Of $ 5 ? 4. If I should be allowed the use of $ 50 for 3 months, how long in return should I lend $ 25 ? 332. Average, or Equation of Payments, is the process of finding when several debts, due at different times, may be. paid at one time without loss to either debtor or creditor. 333. The Average, or Equated Time, is the date of payment. WRITTEN EXERCISES. 5. July 1, A owes B $ 100; of which $ 20 is due in 2 months, $40 in 3 months, $30 in 4 months, and $10 in 5 months. When may the $ 100 be equitably discharged by a single payment ? Solution. A is entitled to 2 months' use of $ 20 = 40 months' use of $ 1 66 3 66 “ $40 = 120 "6 A is entitled to 330 months' use of $1, which is equivalent to the use of $ 100 for do of 330 mo., or 33 mo., or 3 mo. 9 d., which, added to July 1, gives the equated time, Oct. 10. |