LESSON LXXXIV 268. To find the bank discount and the proceeds of a note. What is the bank discount of $350, at 90 days? what are the proceeds? MODEL OPERATION. $350× 0.015-$5.425, the discount for 93 days. NOTE-It is the custom of banks to make the discount of a note equal to the simple interest for three days more than the time specified in the note. Hence the following (a.) RULE.-I. Compute the interest on the face of the note to maturity; the result will be the bank discount. II. From the face of the note deduct the bank discount, and the remainder will be the proceeds. 676. What is the discount of a note of $375, at 90 days, discounted at a bank at 7 per cent.? 677. What are the proceeds of a note of $437, at 60 days, discounting at a bank, at 8 per cent.? 678. What shall I receive from a note of $480, due in 30 days, discounted at 6 per cent. ? 679. What are the proceeds of a note of $640, due in 90 days, discounted at a bank at 5 per cent.? 680. I sold a quantity of merchandise worth $240, and in payment took a note for $275, at 90 days, which I had discounted at a bank; how much did I make by the opera tion? 681. A man paid $375 cash for a span of horses, and sold them immediately for a note of $400; he took this note to a bank and had it discounted at 90 days; how much did he gain by the sale of his horses? 682. A man bought a house for $8741, and gave his note at 90 days for that amount; how much ready money did his house cost him? 683. A man sold a farm for $8471, and took a note at 90 days for the amount; he had the note discounted at a bank; how much ready money did he realize from his farm? 684. $300. NEW ORLEANS, LA., Oct. 8, 1863. Ninety days from date I promise to pay to the order of Luther Bryant, at the Farmers' Bank, three hundred dollars, value received. JOHN BROWN. This note was discounted Oct. 15, 1863; what were the proceeds? 685. $530. BOSTON, MASS., Jan. 1, 1864. Nine months after date I promise to pay Allen Wild, or order, five hundred and thirty dollars, with interest, value received. H. H. WILLIAMSON. This note was discounted March 13, 1864, at 8 per cent.; what were the proceeds? (See 267. 1.) LESSON LXXXV. 269. To find the face of a note, when the proceeds, time and rate per cent. are given. For what amount must I draw my note, to realize $500 at a bank, discounting at 90 days? MODEL OPERATION. 1. $1×0.015=$0.015, the discount on $1 for the given time. 2. $1-$0.015-$0.9841, the proceeds of $1. 3. $500÷0.9843=$507.872, the face of the required note. ANALYSIS.-1. Find the bank discount of $1 for 93 days. 2. Find the proceeds of $1 for 93 days. 3. Find the amount of the required note. If $0.984 proceeds require $1 of the required note, $500 proceeds will require as many dollars as $0.9845 are contained times in $500, which are 507.872. Therefore, to realize $500 at a bank, discounting at 90 days, my note must be drawn for $507.872. NOTE.-Require the pupil to write a rule from the analysis. 686. What should be the face of a note at 30 days, to realize $574, when discounted at 10 per cent.? 687. What must be the face of a note at 90 days, to realize $870, when discounted at 8 per cent.? 688. What must be the face of a bankable note that, when discounted for 5 months, at 7 per cent., will have a present worth of $94.50? 689. I sold a span of horses for $389 cash; should I take a note for 2 months at 6 per cent., for how much must the note be drawn that by having it discounted I may realize my price? 690. What must be the face of a bankable note which, when discounted at 3 months and 8 days, gives a present worth of $528, the interest being 6 per cent.? 691. For what sum must I draw my note, so that the bank proceeds, at 7 per cent. at 60 days, may be $400? 692. I bought, in New York, merchandise to the amount of $5387 cash. Not having the money, I gave my note, payable in 60 days; what must be the face of it, the discount being at 6 per cent.? 693. A merchant bought merchandise to the amount of $587 cash; what must be the face of a note on interest for 3 months, that will meet the demand, the discount being at 7 per cent.? QUESTIONS.-What is the market value of stock? (200.) What is a dividend? (201.) Give the analysis of the operation of finding the commission on any amount or quantity. (202.) Give the analysis of finding the commission, when deducted from the remittance. (203.) Give the analysis of finding the value of stock when at a premium or discount. (204.) Give the analysis of finding what quantity of stock can be purchased for a certain sum. (205.) LESSON LXXXVI. EXCHANGE. 270. Exchange is the process of remitting value from one place to another by means of written orders. 271. A Bill of Exchange is a written order addressed to a person residing at a distance, directing him to pay to the person in whose favor the bill is drawn or his order, a certain sum of money, at a given time. 272. The Drawer, or Maker, is the person who draws the bill, or orders the money to be paid. 273. The Drawee is the person who is ordered to pay the bill. 274. The Payee is the person to whom the bill is ordered to be paid., 275. The Buyer, or Remitter, is the person who purchases a bill of exchange. 276. An Acceptance is the promise of the drawee to pay the bill when due, and it is usually made by writing accepted and the signature of the drawee, on its face. 277. An Indorsement of a bill is a writing upon (a.) NOTE.-When the payee simply writes his name on the back of the bill, it is transferable to bearer; but if he prefixes to his signature "Pay to the order of John Edmonds," then the bill is transferred to Mr. Edmonds, who, when he collects it, must in turn indorse it. Indorsers are separately responsible for the amount of the bill in case the drawee fails to make payment. A bill made payable to bearer may be transferred without indorsement. its back, by which the payee transfers the bill to another person. 278. A Domestic Bill is one whose drawer and drawee reside in the same country or state. 279. A Foreign Bill is one whose drawer and drawee reside in different countries or states. 280. The Course of Exchange is the variation between the face of a bill and its cost. It may be either at a premium or at a discount. 281. Exchange is said to be at PAR when the cost equals the face of the bill. 282. Exchange is said to be at a PREMIUM, or ABOVE PAR, when the cost is greater than the face of the bill. 283. Exchange is said to be at a DISCOUNT, or BELOW PAR, when the cost is less than the face of the bill. QUESTIONS.-What is discount? (259.) What is present worth? (260.) What is a bank? (261.) What is bank discount? (262.) What is a promissory note? (263.) What are bank notes? (264.) What are days of grace? (265.) What is the maturity of a note? (266.) What are the proceeds of a note? (267.) What is considered the face of a note when on interest? (267., a. 1.) How are banks organized? (267., a. 2.) LESSON LXXXVII. 284. To find the cost of a draft in domestic exchange when at a premium or at discount. ROCHESTER, N. Y., Mar. 13, 1864. At sight pay to John Clark or order five hundred and fifty dollars, value received, and charge the same to our account. To Messrs. DANIEL PARKS & Co., Washington, D. C. F. SHAW & Co. |