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at 95, interest payable in gold, when gold is quoted at 67% premium? How much more profitable in currency is it on each $100 invested?

20. A. B. Howard sold a mill for $13850, which had been paying an annual profit of 5% of that sum, and invested the proceeds in U. S. 10-40's at 1113, paying 1% brokerage. Was his yearly income increased or diminished, and how much in currency, gold being at 5% premium?

21. How much must be invested in 6% stock, purchased at 90, to secure to the purchaser an income of $900 annually?

ANALYSIS.Since the income of $1 is $.06, it will require

as

many dollars to secure an income of $900 as $.06 is contained times in $900, which is 15000 times; and since the stock is selling at 90% of its par value, 90% of $15000, which is $13500, will be the cost.

PROCESS,

$900.06=$15000, par value of stock.
$15000.90 $13500, cost of stock.

22. I desire to invest in Ohio & Mississippi R. R. bonds which bear 6% interest, a sum of money sufficient to bring an income of $1000. If the bonds can be bought at 91%, how much money must I invest, brokerage %?

23. What sum must I invest in Louisiana 7's at 1071 to secure an annual income of $1750?

24. What sum must I invest in U. S. 6's at 112 to secure an annual income of $1750?

25. What sum must be invested in 6% stock at $84.50 per share to yield an income of $900 annually?

26. What per cent. income on my investment will I receive if I buy 6% stock at 20%

premium?

PROCESS.

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ANALYSIS.-Since $1 of the stock costs $1.20, and the income from it is $.06, amount of the investment.

27. What is the rate per cent. of income from bonds which pay 7% interest when they are bought at 105?

28. If stock which pays a semi-annual dividend of 51% be bought at 10% premium, what rate per cent. of income does it pay?

29. Which affords the greater per cent. of income, bonds bought at 125 which pay 8%, or bonds which pay 6% bought at a discount of 10% ?

30. Which is more profitable, and how much per cent., to buy New York 7's at 105%, or Louisiana 6's at 98%?

31. What per cent. of income does stock paying 9% dividends afford if it is bought at 112?

32. How much must I pay for New York 6's so that I may realize an income of 9% on the investment?

PROCESS.

$.06$.09.66%

ANALYSIS. Since the income is 6% of every dollar of the par value of the stock, if an income of 9% on an invest

ment be desired, then 6% of the par value of the stock must be 9% of the sum paid for $1 of the stock, which is $.663, or, the stock must be bought for 66% of its par value.

33. How much must I pay for stock which pays a dividend of 15% so that I may realize 7% on my investment?

34. How much premium must I pay on stock which pays a 10% dividend so that I may realize 8% on my investment?

35. At what price must I buy 7% stocks so that they may yield an income equivalent to 10% stocks at par?

36. What must I pay for New York 6's so that my purchase may yield me 7%?

37. At what price must I purchase 15% stock that it may yield the same income as 6% stock purchased at 90?

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38. What is the currency value of $9280 in gold, when gold is selling at 1071?

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39. What is the currency value of $7225 in gold, when gold is at a premium of 81%?

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40. What is the value in gold of $5000 in currency, when the premium on gold is 61%?

41. When gold is selling at 1051, what is the value of $7250 in currency?

42. The net earnings of a company whose capital stock is $2000000 was $135000. If they reserve $5000 as a surplus fund, what per cent. dividend can they declare?

43. Mr. A. purchased 250 shares of stock at 75, in a company whose capital was $1500000. The gross earnings of the company for 1876 were $225000, the expenses were 40% of the gross earnings, and they reserved a surplus fund of $10000. What per cent. dividend did Mr. A. receive on his investment?

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44. A capitalist owning 200 shares of stock of $150 per share, on which he was receiving a dividend of 3% semiannually, exchanged them for 6% bonds purchased at 98. Did he gain or lose, and how much annually?

45. If a man who had $5000 of U. S. 6's of '81 should sell them at 115, and invest in U. S. 10-40's purchased at 105, would he gain or lose, and how much annually?

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INSURANCE.

429. 1. How much must I pay to secure myself against loss by fire, or, insure my property for $5000, if an annual sum or premium of 1% is charged by those who take the risk?

2. What will be the annual premium for insuring property for $10000 at 1%?"

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3. What will be the annual premium for insuring property. for $1500 at 11%?

4. What is the premium at 4% for insuring a vessel and cargo to the amount of $36000?

5. What will it cost to insure $1500 worth of tea at %?

6. What must be paid for insuring a building valued at $3000, for of its value at 14%?

7. If a merchant insured his goods for $2000 at 2%, how much premium did he pay?

8. How much premium did a merchant pay who insured his stock of boots and shoes for $6000 at 11%?

9. A man paid $25 premium for insuring his house and furniture against loss or damage by fire. For how much was he insured, if the rate of insurance was 4%?

10. For how much was a man insured who paid $50 premium for insuring his barn and live stock at 1%?

11. How much was the amount of insurance when the premium paid for insuring a house and furniture at 3% was $75?

12. For how much is a farmer insured on his barns and the grain in them, who pays $60 premium, when the rate is 2%?

DEFINITIONS.

430. Insurance is indemnity against loss or damage. It is of two kinds: Property Insurance and Personal Insurance.

CASE I.

PROPERTY INSURANCE.

431. Property Insurance is indemnity against loss or damage by fire, or Fire Insurance; against loss or damage by casualties at sea, or Marine Insurance; and against loss or damage by fire, lightning, etc., to cattle, horses, etc., or Live Stock Insurance.

432. The Policy is the contract or agreement between the insurance company and the person insured.

433. The Premium is the sum paid for insurance.

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The insurance business is conducted mostly by corporate companies, which are either Mutual or Stock companies.

434. A Mutual Insurance Company is one in which the person insured participates in the profits and shares the losses of the company.

435. A Stock Insurance Company is one in which the capital is contributed by stockholders, who alone participate in the profits and share the losses.

A few companies combine the features of both stock and mutual companies. They are called Mixed Companies.

436. The computations in insurance involve the same elements as do the fundamental problems in Percentage. The corresponding terms are:

1. The Amount Insured is the Base.
2. The Rate of Premium is the Rate.
3. The Premium is the Percentage.

WRITTEN

EXERCISES.

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1. How much is the premium on a policy of insurance on a dwelling for $3000 if the rate of premium is 14% ?

PROCESS.

$3000.01 $37.50

14% of $3000 must be found, which is $37.50.

ANALYSIS. Since the premium is 14% of the amount insured, to find the premium,

FORMULAS.

RULE.-Since the same elements are involved as in the fundamental problems in Percentage the rules are the same.

1. Sum insured

Rate: =Premium.

2. Premium

Sum insured - Rate.

3. Premium Rate Sum insured.

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