A ship whose value is £15,423 is insured at 19⅔ per cent; what does the insurance amount to?--_Answer_, £3033. 3. 9½ ²/₅. 247. In reckoning how much a bankrupt is able to pay his creditors, as also to how much a tax or rate amounts, it is usual to find how many shillings in the pound is paid. Thus, if a person who owes £100 can only pay £50, he is said to pay 10_s._ in the pound. The rule is easily derived from the same reasoning as in 246. For example, £50 out of £82 is 50 50×20 £---- out of £1, or ----- shillings, 82 82 or 12_s._ 2½ ¹⁵/₄₁ in the pound. 248. INTEREST is money paid for the use of other money, and is always a per-centage upon the sum lent. It may be paid either yearly, half-yearly, or quarterly; but when it is said that £100 is lent at 4 per cent, it must be understood to mean 4 per cent per annum; that is, that 4 pounds are paid every year for the use of £100. The sum lent is called the _principal_, and the interest upon it is of two kinds. If the borrower pay the interest as soon as, from the agreement, it becomes due, it is evident that he has to pay the same sum every year; and that the whole of the interest which he has to pay in any number of years is one year’s interest multiplied by the number of years. But if he do not pay the interest at once, but keeps it in his hands until he returns the principal, he will then have more of his creditor’s money in his hands every year, and if it were so agreed will have to pay interest upon each year’s interest for the time during which he keeps it after it becomes due. In the first case, the interest is called _simple_, and in the second _compound_. The interest and principal together are called the _amount_. 249. What is the simple interest of £1049. 16. 6 for 6 years and one-third, at 4½ per cent? This interest must be 6⅓ times the interest of the same sum for one year, which (245) is found by multiplying the sum by 4½, and dividing by 100. The process is as follows: (230) (_a_) |£1049 . 16 . 6 +-------------- _a_ × 4 | 4199 . 6 . 0 _a_ × ½ | 524 . 18 . 3 +-------------- (82) 100) 47,24 . 4 . 3(£47 . 4 . 10¹¹/₁₀₀ 20 ---- (228) 4,84[52] 12 ------ 10,11[53] (_b_) £47 . 4 . 10¹¹/₁₀₀ Int. for one yr. +------------------ _b_ × 6 | 283 . 9 . 0⁶⁶/₁₀₀ _b_ × ⅓ | 15 . 14 . 11³⁷/₁₀₀ +--------------------- £299 . 4 . 0³/₁₀₀ Int. for 6⅓ yrs. [52] Here the 4_s._ from the dividend is taken in. [53] Here the 3_d._ from the dividend is taken in. EXERCISES. What is the interest of £105. 6. 2 for 19 years and 7 weeks at 3 per cent? _Answer_, £60. 9, very nearly.