INTEREST. Interest is an allowance of so much per cent made by a debtor to a creditor, for the use of money. In the New England States, the rate of interest is established by law at 6 per cent per annum; that is, $6 for the use of $100, or £6 for the use of £100, for one year; and in the same proportion for a greater or less sum, or for a longer or shorter time. In New York, the lawful interest is 7 per cent, &c. 1. Principal is the sum due, for which interest is paid. 2. Rate is the sum per cent agreed on. 3. Amount is the principal and interest added together. Interest is of two kinds, Simple and Compound. SIMPLE INTEREST. Simple Interest is when interest is computed only on the original principal. 1. To find the interest of any given sum for one year. RULE. Multiply the principal by the rate per cent and divide the product by 100; the quotient will be the interest for one year. Note. By this Rule are calculated Commission, Brokerage, Insurance, buying and selling Stock, &c. EXAMPLES. 1. What is the interest of $511 for one year, at 6 per cent ? We multiply by the rate per cent, and point off two figures for dividing by 100, and the answer is 3066 dollars, or 30 dollars 66 cents. 100 2. What is the interest of $1236, 38 cents for 1 year, at 7 per cent? After multiplying by the rate per cent, we place the separatrix as in Federal money. Then to divide by 100 100 we point off two figures, and the answer is 86 dollars 54,66 cents, or $86 54 cents 6m. 3. What is the interest of 341 dollars 37 cents for one year, at 5 per cent? $341,37 5 After multiplying by the rate per cent and placing the separatrix as in multiplication of Federal money, we need only call the figures on the left so many cents and those on the right decimals of a cent; thus 1706,85 cents $17 6c. 85m. 17'06,85 3. Required the interest of $800 for one year, at 5 per Ans. $44. cent. cent. 4. Required the interest of $956,25 for one year, at 7 per cent. Ans. $66 93c. 75m. 5. Required the interest of $1356 for one year, at 6 per Ans. $81,36. 6. What is the interest of £500 for one year, at 5 per cent ? Ans. £25. 7. Required the amount of $1528,25 for one year, at 4 per cent? Ans. $1589,38. 2. To calculate interest for any number of years, months, &c. GENERAL RULE. 1. Find the interest for one year as before.. 2. Multiply the interest for one year by the given number of years. 3. For the months, take even parts of a year; thus, for 1 month take of a year, and for 2 months or 1, &c. 4. For days, take even parts of a month, allowing it to contain 30 days; (or, if the sum be large and great accuracy required, work for the days by the Rule of Three Direct, by saying, as 365 days are to the interest for one year, so is the given number of days to the interest required.) EXAMPLES. 1. What is the interest of $84,54 for 3 years 7 months and 10 days, at 6 per cent per annum? 6 mo.= $84,54 of 1 year. 507,24 interest for 1 year in cts. 3 [mills, &c. 2. What is the interest of 210 dollars for 5 years, at 6 per cent per annum ? Ans. $63. 3. Required the interest of $511,65 for 3 years and 4 months, at 5 per cent per annum. 4. Of $48,25 for two and a half Ans. $85,27.. years, at 6 per cent. Ans. $7, 23c. 75 m. 5. Of 249 dollars for 3 years 9 months, at 6 per cent. Ans. $56, 2 cents. 6. Of $27,56 for 2 years, at 5 per cent. Ans. $2 75cts. 6m. 7. Of $951,17 for 4 years, at 5 per cent. Ans. $190 23cts. 4m. 8. What is the interest of $1 for 16 years 8 months, at 6 per cent per annum? Ans. $1. 9. What is the interest of $824,41 for 3 years 5 mos. and. 10da., at 6 per cent per annum? Ans. $170,35cts. 92m.+ 10. What will £1825 amount to in 5 years, at 4 per cent per annum? Ans. £2190. 11. What is the interest of $145,96 for 3 years 9 mos., at 5 per cent per annum ? Ans. $28, 73c. 58m. 12. What will $15195 amount to in 5 years 4 months and 20 days, at 7 per cent? Ans. $20926, 89c. 16m.+ 13. What is the interest of $456 from April 15th, 1829, to March 5th, 1833, at 6 per cent? Ans. $106,40. 14. A note dated October 5th, 1831, for 256 dols. was paid, Note. In this question it will be seen that the principal, interest, and time, are given, to find the rate per cent. Therefore, if we divide the interest by the product of the principal and time, the quotient will be the rate per cent. Thus, 381×9=3429(240,03(07-7 per cent. Ans. 5. At what rate per cent will $500 gain $127,50 interest in 8 years? Ans. 3 per cent. CASE IV. The principal, rate per cent, and amount given, to find the time. RULE. Subtract the principal from the amount, and the remainder will be the interest. 2. Divide the interest by the product of the ratio and principal, and the quotient will be the time. EXAMPLES. 1. In what time will $325 amount to $390, at 5 per cent per annum ? $390,00 325×05 16,25)65,00(4 years, Ans. 65,00 2. In what time will $450 amount to $698,625, at 6 per cent, or ,065 ? Ans. 8,5 or 8 years. 3. In what time will $381 amount to $621,03, at 7 per cent? Ans. 9 years. 4. In what time will $500 gain $127,50 interest at 3 per cent? 500,03=1500)127,50(8,5=81 years. 5. In what time will $856,17 gain $222,6042 at 6 per cent per annum? Ans. 4 years. CASE V. To calculate interest for days. RULE. Multiply the principal by the ratio and that product by the given number of days, and divide the last product by 365, (the number of days in a year,) and you will have the interest required. EXAMPLES. 1. What is the interest of $341 for 250 days, at 6 per cent? $341 20,46 250 102300 4092 365)5115,00(14,013+$14 1c. 3m.+ 2. What is the interest of $125 for 135 days, at 5 per cent per annum ? Ans. $2 54c. 28m.+ 3. What is the interest of $525 for 73 days, at 7 per cent? Ans. $7,35. CASE VI. To compute interest on notes or obligations, when there are payments in part, or endorsements. RULE. 1. Find the amount of the whole principal for the whole time. 2. Find the amount of each payment from the time it was paid to the time of settlement; and lastly deduct the amount of the several payments from the amount of the whole principal. EXAMPLES. 1. For value received, I promise to pay William Merchant, or order, five hundred dollars, with interest. July 1st, 1828. JAMES PAYWELL. How much remained due, April 16th, 1832, interest at 6 per cent? Principal on interest from July 1st, 1828, $500 00 Interest to April 16th, 1832, 3yr. 9m. 15d. (45m.) 113 75 Whole amount of principal, $613 75 |