132. What is the amount of $60 at 7% per annum for 12 years at compound interest?

133. What is the amount of $550.50 at 8% compound interest for 18 years?

134. What is the compound interest of $95 for 20 years at 8%? 135. What is the interest of $400 for 7 yr. 6 m. at 4% for each 6 months, compounding the interest semi-annually?

136. What is the (simple) interest of $555.55 for 5 yr. 5 m. 5 d. at 5 % ?

137. What is the amount of $175.25 for 3 yr. 7 m. 8 d. at 6%?

138. Find the interest of $675 from July 28, 1894, to Nov. 26, 1894, at 4%.

139. What is the exact interest at 41% of $83.35 from May 17, 1895, to Aug. 10, 1895?

140. What principal at 5% will amount to $621 in 4 12 d. ?

yr. 8 m.

141. What is the present worth of $237.53 due in 10 months? What is the discount?

142. How long will it take $525 to gain $85 at 5%? 143. What sum at 4 % will give an annual income of $576? 144. What was due on the note on page 196 Dec. 12, 1894 ? 145. What is the compound interest of $875 for 5 yr. 6 mo. at 6%?

146. What is the amount of $323.50 for 3 yr. 6 m. 10 d. at 5%?

147. What is the amount at simple interest of $37.45 for 3 yr. 8 m. 19 d. at 5%?

148. Find the amount at simple interest of $535.58 for 2 yr. 7 m. 8 d. at 41%.

275.55.

BANK DISCOUNT.

Boston, Aug. 26, 1895

Three months after date I promise to pay to the order of George C. Davis two hundred seventy-five

55

and dollars.

100

Value received.

William M. Carroll.

371. If the note above is discounted at a bank on the day of its date, Aug. 26, 1895, the bank pays George C. Davis (or his order) $275.55 less the interest of $275.55 for 3 months, that is, $275.55-$4.13, or $271.42.

372. Bank Discount is, therefore, only simple interest paid when the money is loaned. $4.13 is the bank discount on the note above.

373. The Avails, or Proceeds, of a note is the amount received by the borrower, and is equal to the face of the note less the interest. In the note above the avails are $271.42.

374. In some States a note is not legally due until three days after the time which the note specifies for its payment. These three days are called days of grace. A note matures upon the last day of grace. Thus, in the note above, if for Boston we write Newport, R. I., the note would be nominally due Nov. 26, 1895, but legally Nov. 29, 1895. This is expressed by writing both dates thus, 26/ 1895. Nov. 29 is the date of maturity of the

note.

29,

375. Hence, to find the bank discount and the avails of a note, payable at a specified future time, without interest,

Rule.

Find the interest on the face of the note, at the given rate, from the time of discounting to maturity, and the result will be the discount. Subtract the discount from the face of the note, and the remainder will be the avails.

NOTE 1. Usually when a note becomes due on a Sunday or legal holiday, it is legally payable on the next secular day; but in a few States, by statute law, it is payable on the preceding secular day.

NOTE 2. A note made payable in a certain number of days is due when this number of days has passed. Thus a thirty days' note dated Jan. 31 is due March 2 (or in leap year March 1); but a note made payable in a certain number of months is due on the same day of the month in which it matures as it is dated; or, if there are not so many days in the month, it is due on the last day of the month. Thus, a one month note dated Feb. 28 matures March 28; but a one month note dated Jan. 29, or 30, or 31 is due Feb. 28, or in leap year Feb. 29. In States where grace is allowed, these notes mature three days later than the time stated above.

NOTE 3. When the time of discount is less than 2 months many banks count the exact days from discount to maturity. Thus, if a note is discounted Oct. 12, and matures Dec. 5, the time, by Art. 274, is 1 m. 23 d., but the bank computes interest for 54 days.

1. What is the bank discount on a 90 days' note for $368? What are the avails?

Interest for 60 days...... .$3.68

$368-$5.52 = $362.48 avails, 2d Ans.

With grace the discount is $5.70, and the avails $362.30.

2. I have a 6 months' note for $768, dated May 12. What will be the avails if I get it discounted Sept. 3?

$ 7.68
1.152

Discount $8.832

$768

Six months expire Nov. 12. From Sept. 3 to Nov. 12 is 2 m. 9 d., the time for which the note is discounted.

$8.83 $759.17 avails, Ans.

=

With grace the discount is $ 9.216, and the avails $758.78.

3. What will be the bank discount and what the avails of a 4 months' note for $8646?

4. Of a 90 days' note for $1842 at 7% ?

5. Of a 6 months' note for $489 at 5% ?

6. A 4 months' note for $629, dated Feb. 27, was discounted April 12. What were the avails?

NOTE 4. When a note bearing interest is discounted before its maturity, the amount of the note at maturity, not its face, is the base for discounting.

7. What are the proceeds of a note for $10000, payable in 6 months and bearing interest, if discounted 2 months before its maturity?

Solution. The amount of $10000 for 6 m. is $10300, and the interest of $10300 for 2 m. is $103, which taken from $10300 leaves $10197, Ans. With grace the amount is $10305, and the interest on $10305 for 2 m. is $103.05, and the proceeds are $10201.95.

8. What are the avails of a note for $6844, payable in 4 months with interest, if discounted 1 month after date? 377. To find the sum for which a note must be written that the avails or proceeds may be a specified sum.

9. For what sum must a 45 days' note be written that the avails may be $240.

$ 1.0000 Interest of $1 for 45 days 0.0075 Avails of $1 .$ 0.9925

The avails of $1 for 45 days are $0.9925, and therefore the face of the note must be as many dollars as $0.9925 is contained times in $240, or $241.81.

$2400.9925 $241.81, Ans.

= =

With grace the avails of $1 are $0.992, and $240÷0.992 = $241.94, Ans. Hence,

Rule.

Divide the required proceeds by the proceeds of $1 for the given rate and time, and the quotient will be the face of the required note.

10. For what sum must a 3 months' note be given, that the proceeds may be $300?

11. A farmer sold produce for which he received a 60 days' note, which he immediately had discounted at the bank. The avails of the note were $593.70; what was its face?

12. A merchant wishes to borrow $1200 at a bank, for 90 days; what shall be the face of the note, the rate of interest being 7 % ?

13. What is the bank discount of a note of $765.84 due in 3 months at 8% ?

$873.45.

BROOKLYN, N. Y., Sept. 17, 1894.

Four months after date I promise to pay John Brown, or order, eight hundred seventy-three dollars and forty-five cents.

Value received.

CHARLES STEVENS.

14. Find the proceeds of the above note if discounted on its date at a bank at 6 %.

15. Find the avails if discounted at a bank Oct. 29, 1894, at

7%.

16. Find the avails if discounted Nov. 26, 1894, at 7%.

Find the proceeds of:

17. A 4 months' note for $315.70, dated June 9, discounted July 25, at 4 %.

18. A 90 days' note for $1125, dated Aug. 15, discounted Sept. 3, at 5 %.

19. A 3 months' note for $768.50, dated Dec. 13, 1894, discounted Jan. 22, 1895, at 5%.