Def. 1. Interest is money, paid for the use of other money lent for a fixed time, at a given rate for every £100 for one year, called the rate per cent. Def. 2. The sum lent is called the Principal. Def. 3. When the Interest, being paid at fixed periods, is calculated only on the Principal, it is called Simple Interest. Def. 4. When the Interest, being left unpaid, is added to the Principal at fixed periods, and with it bears interest for the future, it is called Compound Interest. Def. 5. The sum of Principal and Interest is the Amount. Def. 6. Discount is an abatement made from a debt in consideration of its being paid before it is legally due. Def. 7. The present worth of a sum of money, due at a certain time, is the difference between the Principal and Discount, or is the sum, which, put out to interest for the given time, would amount to the given sum. A.-Simple Interest. I. TO FIND THE INTEREST DUE ON A GIVEN PRINCIPAL AT A GIVEN RATE PER CENT. FOR A GIVEN TIME. Rule 1. If the time be an exact number of years, multiply the Principal by the rate per cent. and the product by the number of years; divide the result by 100; the quotient will be the interest required. Rule 2. If the time be a number of years and months, reduce the time to months, and calculate interest as for an equal number of years; divide the result by 12, the quotient is the interest required. Rule 3. If the time be a number of years and days, calculate the interest for 1 year, multiply this by the number of days, and divide by 360; subtract from the result its 1-72nd part; the remainder will be the interest for the number of days nearly. If a further correction be required, add 1--72nd part of the former one. If the calculation be conducted by decimals, (which in most instances is desirable and sufficiently accurate,) multiply the interest for one year by 1-5th of the number of days, and divide by 73, or by 72, applying the same correction as before. Having thus found the interest for the days, add that for the years. Rule 4. To calculate the interest upon partial payments or an account current, multiply each sum, which lies at interest, by the number of days; add the products; multiply the sum by twice the rate per cent.; divide the product by 73000. Note. The division by 73 may be shortly effected thus:-Rule. Take 1-100th of the dividend, 1-3rd this result, 1-10th of this third, and 1-10th of this tenth. Add these results, and subtract from the sum .001 for every ten. To divide by 73000, take 1-100000th of the dividend, and proceed in the same way as before. 2523 0 0 = Interest for 1 year at £400 per cent. 100)151,38 0 0 = Interest for 6 years....... 20 7.60 s. 7.20 d. Interest for 6 years at £4 per cent. = £151: 7:73. Ans. 2. Find the interest on £2200: 10: 6 for 4 years 9 months at 5 per cent. £. 8. d. 3. Find the interest on £742: 13: 4 for 175 days at 5 per cent. £. S. d. 742 13 4 5 3713 68 Principal (P) 4. £18 13 928 Ans. Find the interest on £955: 10: 6 for 6 years 275 days at 53 per cent. £955: 10:6 = £955.525. 275 days 55 days 5. Find the interest on £1056: 15: 6 for 2 years 89 days at 31 per cent. £1056: 156 = £1056.775 = Principal .0325 5283875 Int. of £1 for 1 year 6. Find the interest on £10765: 10: 0 for 25 years 333 days at 4 per cent. £10765: 100 = £10765.5 = Principal 7. The same example worked by the short rule for division by 73. £10765: 10:0 = £10765.5 = Principal B CX 4 100 = .04 Int. of £1 Ans. £11158: 7:4. 8. A bill of £2000 became due on March 31, of which £500 was paid on May 25, £700 on July 31, £500 on Sept. 30, and the balance on Dec. 31; how much interest was then due at 4 per cent? and what was the last payment? |
