DISCOUNT. 305. Discount is an allowance made for the payment of a debt, note, or other obligation before it is due. 306. The present worth of any debt, note, or other obligation, is the amount of it, less the discount. 307. The true present worth of a debt payable at a future time without interest, is such a sum as, being put at legal interest, will amount to the debt when it becomes due. 308. The true discount is the difference between the whole debt and the true present worth. Time is always an element in the operations of true discount. 309. The corresponding terms of true discount and percentage are as follows: 1. The true present worth is the base. 2. The rate % is the rate. 3. The true discount is the percentage. 4. The whole debt is the amount. 310. To find the present worth and true discount. 1. Find the present worth and the true discount of $362.95, payable in 7 mo. 12 da., at 6%. EXPLANATION.-The amt. of $1 for 7 mo. 12 da., at 6% = $1.037. The present worth is $362.95 ÷ 1.037: $350. The true discount, $362.95 – $350 = $12.95. amt. of $1 = present worth. the present worth and discount, merchant buys goods for $4200 on 4 mo. credit, but is a discount of 3% for cash. If money is worth 1% a what is the difference? I sell goods for $1250 on 6 months' credit, which cost 5 cash, what is my loss, money being worth to me 10%? hat is the present worth of a debt for $1005, on which o be paid in 10 mo., and the remainder in 1 yr. 3 mo., of interest being %? at is the difference between the interest and true dis$130, due 10 mo. hence, at 10%? person sold goods to the amount of $3750, 15% payash, 25% in 3 mo., 20% in 4 mo., and the remainder What ready money would discharge the whole debt, eing worth 6%? Bank Discount is simple interest paid in advance k, for the payment of a note before it becomes due. Days of grace are three additional days, usually by law for the payment of a note after the expiration me specified in it. The maturity of a note is the expiration of the me, including the days of grace. The term of discount is the time from the disE a note to its maturity. 316. A protest is a formal declaration in writing, made by a notary public, giving legal notice to the maker and the indorsers of a note, of its non-payment. 1. The failure to protest a note on the third day of grace releases the indorsers from all obligation to pay it. 2. If the third day of grace or the maturity of a note occurs on Sun day or a legal holiday, it must be paid on the day previous. 317. The corresponding terms are as follows: 1. The face of the note is the base. 2. The rate % is the rate. 3. The bank discount is the percentage. 4. The term of discount is the time. 318. To find the bank discount and proceeds of a note. 1. Find the bank discount and proceeds of a note for $450, due in 60 da., at 6%. EXPLANATION.-The term of discount is 63 da. = $4.725. The discount is the int. of $450 for 63 da., at 6% 1. Face × rate × term of disc't = bank disc't. 2. Face bank discount = proceeds. Find the bank discount and proceeds of 2. $368 for 90 da., at 7%. 6. $875 for 3 mo. 10 da., at 6%. 10. Find the bank discount on a note at 6 mo., for $672.50, at 6%. 11. What will be the proceeds of a note at 3 months for $1500, discounted at a bank, at 7%? Required the bank discount and proceeds of a note for ue in 9 mo. 27 da., at 8%. ind the difference between the bank and the true disn a note for $1500, due in 60 da., at 6%. Find the proceeds of a 4 mo. note for $560, dated - 1882, and discounted May 15, 1882, at 6%. the discount and proceeds of notes, using the following ons, all dates being in the same year : ind the proceeds of a note for $1615, due in 3 mo., terest, at 7%, discounted at bank. a note bears interest, find the discount on the amount of the aturity. the maturity, term of discount, and proceeds of the ig notes: NEW ORLEANS, June 12, 1882. Six months after date, I promise to pay JAS. MARTIN, r, twelve hundred fifty dollars, with interest at 5%, eceived. GEO. LANE. unted at a broker's, Nov. 15. CHICAGO, March 16, 1882. $916 SAN FRANCISCO, Feb. 23. Two months after date, we jointly and severally pay JOHN BLISS, or order, nine hundred sixteen 25 with int. at 2% a mo. Value received. T. H. R B. F. M Discounted at Marine Bank, Feb. 21, at 10%. 319. To find the face of a note. 1. For what sum must a note be drawn, payable in at 6%, so that the proceeds may be $5000? EXPLANATION-The bank discount of $1 for 93 da., at 6% is = $5078.72. FORMULA: Proceeds of note÷proceeds of $1 = fac Find the face of notes, the proceeds, time, and r which are as follows: 8. Find the face of a 6 mo. note, the proceeds of wh counted at 2% a month, are $496. Find the face of notes, answering to the following Date of disc't. Mar. 10, Mar. 13, 12. Owing a man $575, I give him a 60 da. not should be the face of the note, to pay him the exact discounted at 1% a mo.? |