a 3288.60 $48.60 = paid for a draft of $3240. 48.60 13 The rate is reduce by 32.4 = 3240.00 = 13%; the 100 result will be the same if reduced to a decimal ;. thus, = 100 ) 1.5000 (.015 REM.—The ratio of the face of the draft and the premium paid on it, reduced to a fraction whose denominator is 100, will be the rate per cent of the draft; the same result is obtained by reducing the fraction to a decimal. The premium is the numerator, and the amount on the face of the draft the denominator of the fraction. 1.5 100 63 010 = 2010 5. What is the cost of a 60 day draft on New York for $5480, at 3% premium, interest off at 6%? Discount % . Premium 3% . Discount above premium 1% of $5480 54.80. 3% of $5480 27.40 $5480.00 36% of $5480 2.74 30.14 Discount = $30.14 $5449.86, Cost. 11 = 6. What is the face of a draft which cost $1007.50, at 1% premium ? 7. What is the face of a draft that cost $992.50, at *% discount? 8. What is the face of a draft on which $5 premium is paid, and the rate 1%? To = $5; 188 = $500, Ans. a 100 FOREIGN EXCHANGE. EXAMPLES. 1. What is the cost in New York of a draft on Lon a don for £346 15s. 6d., at 8% premium ? 158. 6d. 12 ) 6d. 20 ) 15.5 .775 12 = 21 = .775. 8 109.3 5 6 £$46.175 x 40 x 108 = 109.355 X 8 X 3 = $2624.52. 2. What amount of debt in London may be paid by depositing $5000 in New York, rate of exchange 8% in favor of London ? 125 2 5 $000 xx 18 = 125 x. = £1041 13s. 4d. 12 3. What is the cost of a draft on London for £546.775 in New York, exchange $4.88 to the £ ? 546.775 X 4.88 = $2668.262. 4. What will a draft on London for £1041 13s. 4d. cost in New York, exchange $4.80 to the £? 5. What is the value in Paris of $5000 in New York exchange $4.85 = £1, and £1 = 25.20 francs ? 6. What sum in New York will pay 2597937 francs in Paris, exchange as in 5th ? 7. What is the value in Hamburg of $5000 in New York, when $4.80 = £1, £1 = 25.20 francs, and 1.80 1= francs =1 mark banco ? 8. What sum in New York will pay 145831 mark banco in Hamburg, exchange as above? 145833 x 18 x = $5000. 9. What debt in St. Petersburg will $5000 in New York pay, when $1.80 = £1 in London, £1 = 25.20f. in Paris, 4f. = 1 thaler in Dantzic, and i thaler = 2.60 roubles ? These problems may be solved by compound equations and ratios. 10. What sum in New York will pay 170624 roubles in St. Petersburg, exchange as above? REM. This circuitous system of Foreign Exchange has led us into the same thing in our own country when it is found to be advantageous; thus, 11. A merchant in St. Louis has a bill of $5000 to pay in New York; in St. Louis a draft on New York costs 11% premium, whilst New Orleans funds can be bought at 11% premium, and at New Orleans Havana funds are 3% discount; and at Havana, New York funds are at a discount of 14%. What sum in St. Louis will pay the bill by the direct and by the circuitous method ? Xørt Direct, $$$$$ x x 8 = $5075. X 25 203 And $$$$Ø x x 488 x 8 = $4974.223 12. What is $4974.2217 in St. Louis worth in New York by the circuitous method ? 4974.2211 x 489 89 48% = $5000. X I have not given a table of foreign values, as they are not permanent. The principle is the same in all cases. REM. 1.-In the ratios, see that the decimals in the numerator and denominator are equal, and then they are like quantities and can be used as such. if REM. 2.-When any thing is purchased at a premium, the ratio of the cost is increasing; as, at 3% premium, the ratio is 10%; purchased at a discount the ratio of the cost is diminishing ; as, at 3% discount, the ratio is 10%; hence, if I purchase a draft for $100 at 3% premium, the cost is $100 x 18% $103 ; and if I purchase a draft for $100 at 3% discount, the cost is $100 x 100 $97. 97 COR. 1.-The cost of a draft, when at a premium, is its face multiplied by an increasing ratio whose denominator is 100 and numerator 100 increased by the premium. Cor. 2.-When there is a discount, the cost of a draft is its face multiplied by a diminishing ratio whose denominator is 100 and numerator 100 diminished by the discount. REM.-Reckoning by the old par value, £1 is equal 40 dollars, and $1 equal £17. The par value of £1 is now fixed by Act of Congress at $4.8665. |