4. A boat load of 8,600 bushels of corn, worth 32 cents per bushel, is insured for three-fourths of its value at 15% premium; if the corn is totally destroyed, what will be the owner's loss? Ans. $721.54. 5. A building worth $9,600 is insured for three-fourths of its value in three companies. The first company takes one-third of the risk at % premium; the second two-fifths of it at %; and the third the remainder at %; what is the total premium? Ans. $50.40. 6. If it cost $324 to insure a property for $21,600, what will it cost at the same rate to insure a similar property for $35,000, if $1.50 is charged for the policy in the latter case? Ans. $526.50. 7. A fire insurance company took a risk of $42,000 at % premium, and reinsured one-third of it in another company at %, and one-half of it in a third company at %; what did the company gain by reinsuring? Ans. $61.25. TAXES. 65. Taxes are sums of money levied on persons, properties, or incomes, for public purposes. Thus, taxes are levied to support the state, county, and city governments; to support schools and charities; and to make improvements, such as paved streets and sewers. 66. A capitation, or poll tax, is a tax levied on persons; a property tax is a tax levied on real estate or personal property; an income tax is levied on incomes or salaries. The poll tax is usually a fixed amount for each citizen over 21 years of age. The property tax is estimated at a certain per cent. of the assessed valuation of the property subject to taxation. 67. Rule. To find a property tax, multiply the assessed value of the property by the rate of taxation. EXAMPLE.-What property tax must a person pay who owns real estate assessed at $34,000 and personal property assessed at $12,500, the rate of taxation being 8 mills per $1, or rate = .008? SOLUTION.-Total assessed value = $34,000 +$12,500 = $46,500. 68. Rule. To find the rate of taxation, subtract from the total tax to be raised the poll tax, if any; divide the remainder by the total assessed valuation of the property to be taxed. This rule is derived directly from the rule, Art. 15, since the tax is the percentage, and the assessed valuation is the base. EXAMPLE. The assessed valuation is $1,375,000 on real estate and $575,000 on personal property. The town votes to raise $12,000 for schools, $2,100 for streets and highways, $3,000 for salaries, $1,500 for support of the poor, and $650 for contingent expenses. There is a poll tax of $1 each on 3,650 persons. What is the rate of taxation and how much must A pay who has property assessed at $26,400 and pays for three polls? SOLUTION.-Total tax = $12,000+ $2,100 + $3,000 +$1,500+ $650 = $19,250. The poll tax is $3,650; therefore, the property tax is $19,250 $3,650 = $15,600. Total assessed value of property = $1,375,000+ $575,000 = $1,950,000. Rate of taxation = $15,600 $1,950,000 = .008, or 8 mills per $1. Ans. A s property tax is $26,400 × .008 = $211.20; his poll tax is $3. $214.20, A's total tax. Ans. 69. EXAMPLES FOR PRACTICE. What is the tax if the assessed valuation of the property is (a) $6,300 and the rate of taxation is 14% ? (b) $34,300 and the rate of taxation is 61⁄2 mills per $1? (c) $9,430 and the rate of taxation is 85 cents per $100? (a) $70.87. Ans. (b) $222.95. (c) $80.15. What is the rate of taxation, mills per $1, if the assessed valuation is (d) $625,000 and the gross tax is $5,230, including 460 polls at $.50 each? (e) $1,364,000 and the gross tax is $18,130, including 1,440 polls at $.75 each? (f) $34,000 and the gross tax is $469.20? Ans. (d) 8 mills. 1. I own real estate worth $8,500 and personal property worth $3,750; both are assessed at three-fifths of their value. The rate of taxation is 1.2%, but I receive a discount of 2% of my taxes for prompt payment. How much do I pay the tax receiver? Ans. $86. 2. A has five lots worth $1,300 each; B has four lots worth $1,000 each; C has two lots worth $1,500 each; D has seven lots worth $800 each, and E has one lot worth $1,150. A tax of $1,417.50 for a street improvement is to be divided among them. What should each pay? 3. The rate of taxation for a certain state is 3 mills per $1; how much state tax must be raised by a county whose valuation is fixed by the State Board of Equalization at $13,876,394? Ans. $48,567.38. ARITHMETIC. (PART 8.) INTEREST. SIMPLE INTEREST. 1. Interest is money paid for the use of money belong. ing to another. 2. The principal is the sum for which interest is paid. 3. The rate per cent. is the per cent. of the principal that is paid for its use for a given time, usually a year. 4. The amount is the sum of the principal and interest. 5. The legal rate is the rate established by law. The 6. Usury is a rate that exceeds the legal rate. penalty for usury is, in some States, the forfeiture of all interest, in others the forfeiture of both principal and interest. In a number of States, no legal notice is taken of usury. 7. In computing interest, a year is usually regarded as consisting of 12 months of 30 days each. Interest so computed is greater than it should be, unless the time is an exact number of years. 8. The elements in interest correspond with those of ordinary percentage as follows: The principal is the base. The interest is the percentage. The product of the rate per year by the time in years is the rate. Thus, if the rate per cent. per year is 4% and the time is 5 years, the rate per cent. is 20%. That is, 20% of the principal For notice of copyright, see page immediately following the title page. |