26. Mary Barton bought a lot for $900. She was assessed $100 for street and city improvements and paid taxes of $10 a year. At the end of 5 years, she sold the lot for $1400. What was her profit, after deducting 5% interest on the original cost of the lot?

27. Albert Wright, who bought a lot at the same price and at the same time as Mary Barton, and who had paid the same assessment and taxes, was obliged to sell his lot at the end of 5 years for the amount he had originally paid for it. How much did he lose, including 5% interest on the cost of the lot?

28. Joseph Little bought a farm for $5300. He spent $220 in improvements. He then sold the farm for $5800. What per cent did he make on his investment?

29. A lot which has a frontage of 35 ft. on the principal business street of a city was sold for $315,000. That was how much per front foot?

*30. Charles Jonas bought a farm of 180 acres for $8500. He ran the farm for several years, during which time he spent $4000 on permanent improvements. He then sold it for $85 an acre. What per cent did he make on the investment, not including interest?

20. Building and Loan Associations

1

Building and Loan Associations encourage systematic saving, and help persons to purchase or build homes of their own, and to accumulate funds for future needs.

To save money through a Building and Loan Association, a person takes from one to forty shares in the company. The deposit required is $1.00 per month on each share.

[Use pencil only when needed.] 1. At $1.00 a month, how much do I deposit on 20 shares each month? In a year?

1 In some states these are called Coöperative Banks, Savings and Loan Associations, etc.

2. Monthly payments are continued until, with the interest, they amount to $200 on each share. This usually requires 12 years. At $200 each, how much would my 20 shares then be worth?

3. Paying $1.00 a month, how much do I pay in per share in 12 years? How much on 20 shares?

4. How much more do I receive at the end of 12 years than I pay in, on one share? On 20 shares?

5. In case members neglect to pay their dues on or before a specified day of the month, they are fined usually 2¢ a month on each dollar due. Delano Townsend failed to pay his dues on 14 shares for the months of July and August. How much was his fine?

6. Building and Loan Associations will loan money to members on their shares as security. Myron Webster borrowed $2000 to help build his house. How much would he be required to pay monthly for 10 shares at $1.00 each and interest on $2000 at 6% per year.

7. Including monthly payments and interest, how much would Myron Webster pay in 12 years when his debt would be discharged? (See problem 6.)

8. If Myron Webster borrowed the $2000 from a Savings Bank, paying interest at 6%, how much interest would he pay to the bank in 12 years?

9. In a recent year the number of Building and Loan Associations in the United States was 7269. That same year the number of the National Banks in the country was 7597. The number of Building and Loan Associations was what per cent of the National Banks?

10. That same year the total capital stock of the National Banks was $1,075,733,375, while the paid-in capital stock of the Building and Loan Associations was $1,503,770,848. How much more than the capital stock of the National Banks was the capital stock of the Building and Loan Associations?

21. Stocks and Bonds

I. CORPORATIONS

Much of the business of the world is carried on by corporations. A corporation is a company authorized by law to carry on a business, the owners together furnishing the capital, or money, required.

If, for example, an electric light company is to be organized requiring a capital of $1,000,000, those who organize the company might arrange to borrow $600,000, secured by a mortgage on the property. By dividing the balance of $400,000 into 4000 shares of $100, the organizers of the company could each buy as many of these shares as desired, and could sell the remaining shares to persons who wish to invest in the enterprise. A person desiring to invest $100 would buy one share; a person desiring to invest $1000 would buy 10 shares.

Each purchaser of these shares receives a certificate called a stock certificate. This certificate states the number of shares of stock in the company the holder has purchased, and the value given each share, called its par value, usually $100. The holder of a stock certificate is called a stockholder in the company. He is entitled to as many votes in the company's meetings as he has shares of stock.

A part of the capital borrowed by a corporation is often obtained by selling bonds. A bond is a certificate indicating that the holder has loaned the company a stated sum of money, which is to be paid on a specified date when the bond "matures" or becomes due. It also states the rate of interest which the holder is to receive on the par value of the bond until the date of maturity.

At the end of stated periods, a corporation making a profit over its running expenses and the interest on its bonds, may divide a portion of its profits among its stockholders. Such divisions of the the profits are termed dividends and are declared as a per cent of the par value of the stock. Thus, a company declaring a quarterly dividend of 2%, pays at the end of a three months period $2 on each share of stock having a par value of $100.

In many companies not all stockholders have an equal right in the profits. The stock is divided in such companies into preferred and common stock. Preferred stock, as its name indicates, has preference over the common stock in the profits; it is entitled to dividends at a fixed rate before the common stock can receive dividends. After the running expenses of the corporation, the interest on its bonds, and the dividends on the preferred stock have been paid, the balance of the profits of the business, if any, belongs to the holders of the common stock and may be distributed as dividends upon the common stock.

A bond is a much safer investment than stock in the same company because the holder of a bond is promised that the par value of his bond will be repaid when it matures, whereas the holder of a stock certificate has no guarantee that his investment will ever be repaid. Moreover, interest on bonds must be paid as it comes due, whereas dividends on stock are paid only when earned by the corporation and declared by the management.

Stocks and bonds are bought and sold in a market called a stock exchange. New York, Chicago, and other large cities have such markets. Of these, "Wall Street" in New York City is the most famous. On the exchange, stocks and bonds are bought and sold by agents called stock brokers. The brokers bid for the stock placed on sale just as men do at an auction. Brokers charge as their commission a fee of about of 1 per cent on the par value of stocks and bonds bought and sold. This fee is called a brokerage. At 1% the brokerage for buying a $100-share of stock would be-¢. The brokerage for selling a $1000 bond would be $-.

Stock is said to be sold at par when it sells for the sum named on the face of the stock certificate, usually $100. Stock is said to be above par when it sells for more than its face value. It is said to be below par when it sells for less than its face value. Thus, stock with a face value of $100 is at par when it sells for $100 a share; it is above par when it sells for $101; and below par when it sells for $99.

In the daily papers will be found reports of the prices at which the stocks of the leading corporations are selling. These reports are called stock quotations. Some stock quotations for a given day were as follows:

1 A committee of pupils may be appointed to keep a record on the blackboard of

the daily newspaper quotations of some of the leading stocks.