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Bank discount is interest paid when the money is loaned. In some states three days (called days of grace) are added to the time named. In the following examples days of grace are not considered. The proceeds, or avails, is the amount received by the borrower.

1. What are the proceeds of a 3 months note for $200, discounted at a bank, at 6 % ?

2. What is the bank discount on a note for $1000 due in 4 months, at 6 %?

3. What is the bank discount on a note for $120 due in 60 days, at 8 % ?

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Boston, Mass., July 20, 1894.
Four months after date I promise to pay James
Smith, or order, $100.
Value received.


What are the avails of this note if discounted on its date at a bank at 6% ?

5. What would be the discount if the above note was accepted at the bank Aug. 20, 1894 ?


1. What is the cost of insuring a house for $4000, at $ % premium ?

The premium is the sum paid for insurance.

The policy is the writing given by the insurer to the insured.

2. A stock of goods worth $3000 is insured for

of its value at 1 % premium. The owner pays $1 for the policy. How much does his insurance cost? How much will he receive if his goods are destroyed by fire ? What will be the loss of the owner ? What the loss of the insurance company?

3. A premium of $60 is charged for insuring at 2 % a building for of its valuation. What is the estimated value of the building ?

4. What is the premium at 4% for insuring $50 000 on a vessel and its cargo ?

5. A man 28 years of age pays $19 annually for an insurance of $1000 on his life. If he should die when 38 years old, how much would the sum his family receives exceed the sum of his payments ?


1. When the rate of taxation is 12 %, what is the tax of Marcus Appleton upon real estate valued at $3000, and personal property valued at $2000 ?

In all the examples given below, assign a poll tax of $2 for every person.

2. The rate of taxation is 13%. What is James Austin's tax upon an estate valued at $6000 ? What is Henry Martin's entire tax, his property being valued at $4000 ?

3. When Edward Manchester pays $28 taxes upon property valued at $2000, what is the rate of taxation ?

4. A town's valuation is $2 000 000. The amount to be raised by taxation, including $1000 from polls, is $31 000. What is the tax rate upon property? What does Henry Smith pay upon property valued at $2500 ? Fred Ellis owns property valued at $8000. How much is he taxed ? James Ellis owns no property. How much is his tax ?


1. A broker sells 100 shares of mill stock at a commission of į%. What is the amount of his commission ?

A broker's commission is computed on the par (or nominal) value of the shares, which is generally $100 a share. In all examples given, the par value of shares is considered $100.

2. A man purchases 20 shares of stock at 10% below par, and sells it at 10% above par. How much does he gain after paying his broker's commission of 1 % for each transaction ?

3. If I purchase $10 000 of U. S. 4% bonds at a premium of 31%, how much must I pay

for them?

4. How much, including the broker's commission at 1%, must I pay for 100 shares of railroad stock at 40% below the par value? If I receive no dividends and sell the stock 5 years later, through a broker, at par, is my investment more or less profitable than if I had loaned my money at 6 % ?

5. If stock bought at par is sold at 5 % below par, how much does a man lose on 200 shares ?


1. What is the annual income from $10 000 invested in U.S. 4% bonds ?

2. When 6 % bonds are bought at an advance of 50%, what is the rate of interest on the sum invested ?

3. When 5% bonds can be purchased at a discount of 20%, what is the rate of interest on the sum invested ? How much must be invested to secure an annual income of $500 ?

4. When 6% bonds yield an income of 5%, at what rate were they purchased ? At what rate must they be purchased to yield 8% ?

5. When savings banks pay 5%, is it a better investment to deposit $1200 in a savings bank or to purchase a 6% bond ($1000) at a premium of 20% ? Why?

6. If a man's annual income from $5000 which he had invested in 6% bonds is $240, at what rate were the bonds purchased ?

7. If my semi-annual income from 6% bonds is $150, what is the face value of the bonds ?

8. At what rate must 4 % bonds be purchased to secure a rate of 5% on the investment ?

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