ACCOUNTS CURRENT. In computing interest on accounts current, all charges are entered on the Dr. side, when they become due, and all receipts are entered on the Cr. side when they are paid. Such accounts are balanced annually, semi-annually, or quarterly. To facilitate the settlement, it is customary to place against each sum the number of days that will elapse till the time the books are balanced, and calculate the interest on each charge. Then take the sum of the Dr. in. terests, and the sum of the Cr. interests; the difference of these two sums will be the balance of interest. EXAMPLE FOR THE BOARD. Abbott & Clark, Philadelphia, in Account Current with Charles Goodhue & Co., Boston. 92 June 1 To Balance due from for 153.50 2.354 mer acct., 66 13 To amount due on note for goods, 400.00 3.28 80 5.333 13.690 10.412 $1225.53 3.278 1844 cts. No. of days. Cr. June 16 By cash, 66 30 By bill of Arnold & Brown, July 29 By cash, on a new account, Dol. 63 Interest, 4.812 2.625 2.975 75.53 10.412 $1225.53 $13.69–$10.41=$3.28, balance of interest due. The balance of the account is found by taking the difference between the Dr. and the Cr. side. 1. Oliver Marriott, Savannah, in Account Current with Daniel Clark, Mobile. Dr. No. of days. Interest. 1844 Interest, 1844 No. of Interest, Feb. 16 To balance due from old account, 91.75 * 25 To merchandise, 163.50 Apl. 13 To merchandise, 219.25 May 16 To balance of interest, Cr. Dol. cts. No. of days. Mar. 30 By cash, 400.00 May 16 By balance to new acct. 2. Joseph Mason & Co., Saint Louis, in Account Current with Thompson & Brother, Lexington. Dr. Dol. cts, Jan. 13 To sheeting, 131.50 Feb. 3 To duck, 87.75 • 25 To cambric, 240.00 Mar. 29 To sundries, 300.00 Apl. 11 To balance of interest, Cr. No. of days. 175.00 Mar. 3 By bill, 200.00 Mar. 18 By cash, 380.75 Apl. 1 By balance to new acct. 3. Henry Chatham, Nashville, in Account Current with George Hapgood & Sons, Baltimore. Dr. 1844 Interest Dol. cts. No. of days. loteroot 500.00 Apl. 5 To amount due on note for goods, May 17 TO ditto, « 28 To merchandise, June 16 To sundries, July 1l To balance to new acct. Cr. June 9 By cash, 11 By tobacco, hele 23 By bill on Atkins & Jones, July 1 By balance of interest, 1844 No. of days. Interest. Dol. cts. COMPOUND INTEREST. It is sometimes stipulated that the interest shall be paid quarterly, semi-annually or annually, and if not paid at the specified time, the interest is added to the principal, and the amount is regarded as a new principal, on which inte. rest is computed to the time it again becomes due. Such interest is called COMPOUND INTEREST, but, though often charged, it is not strictly legal. To find the amount of any sum at compound interest, Increase the principal by the interest each time it becomes due, and consider the amount a new principal. EXAMPLE FOR THE BOARD. What will be the amount of $280 for ly. 10mo. 22d., interest payable semi-annually! 280 313.1843 amt. for ly. 10mo. 22d. 1. What is the amount of $100 for ly. 2mo. 15d., at 5 per cent., interest payable quarterly? 2. What is the amount of $375 for 2y. 11mo. at 45 per cent., interest payable semi-annually ? 3. What is the compound interest of $180 for 4y. 5mo.? 4. What is the difference between the simple and compound interest of $1000, for 3y. 9mo. 12d. ? 5. What is the compound interest of $50 for 1y., interest payable monthly ? 6. What is the amount of $225.50 for ly. 11mo. 25d., at 7 per cent., interest payable semi-annually? 7. A note for $631 was dated June 19, 1841. To what did it amount Aug. 25, 1844, the interest being payable semi-annually? [For more examples in Compound Interest, see GeoMETRICAL PROGRESSION, and ANNUITIES.] PROBLEMS IN INTEREST. I. The PRINCIPAL, INTEREST, AND TIME, BEING GIVEN, TO FIND THE RATE,– Divide the given interest by the interest at 1 per cent. for the given time. 1. If I pay $68.705 for the use of $1963.00 six months, what is the rate per cent. ? 2. At what rate per cent. will $421.50 amount to $674.40 in by. 8mo. ? [The interest is found by subtracting the principal from the amount.] 3. At what rate per cent, will a merchant double his capital in six years ? 4. If a capital of $913 amounts to $1250 in 15 months, what is the annual gain per cent. ? II. THE PRINCIPAL, INTEREST AND RATE, BEING GIVEN, TO FIND THE TIME, Divide the given interest by the interest for 1 year, at the given rate. 5. In what time will $1500, at 7 per cent., amount to $1920 ? 6. The interest on a note of $750 was $131.25, and the rate was .05. What was the time? 7. A note of $431.00 amounted, at its settlement, to $546.291. How long had it been on interest, the rate being 6 per cent. ? 8. In what time will any principal be doubled, at 4 per cent. ? At 5 per cent. ? 6 per cent. ? 7 per cent. ? III. THE TIME, RATE AND INTEREST, BEING GIVEN, TO FIND THE PRINCIPAL, — Divide the given interest by the interest of $1.00 for the given time. 9. What principal, at 6 per cent., will yield $150 in 18 months ? 10. A man's property yields 54 per cent. interest. What is he worth, his annual income being $1375 ? 11. The quarterly expenditure of a charity school is $600. What sum of money, yielding 8 per cent., will support it? 12. What is the face of a note which, at 7 per cent., will yield $111.65 interest in 3y. 8mo. ? IV. THE TIME, RATE AND AMOUNT, BEING GIVEN, TO FIND THE PRINCIPAL, Divide the given amount by the amount of $1.00 for the given time, 13. What principal will amount to $500.00 in 2y. 6mo., -or what is the present worth of $500.00, due in 2y. 6mo.? 14. What is the present worth of $1844, due in ly. 8mo. ? 15. What is the present worth of $725.50, due in by., interest at 5 per cent. ? 16. What is the present worth of $2000.00, due in Sy. 6mo., interest at 7 per cent? DISCOUNT. DISCOUNT is an allowance for the payment of money before it is due. Equitable Discount is found by subtracting the present worth (which is found by Problem IV. of the last chapter) from the amount. BANK, or BUSINESS DISCOUNT, is the same as Bank In. terest. In computing discount, it is customary to add 3 days* to the time stated in the note. These 3 days are * In Pennsylvania, 4 days are added. |