Example: What is the proceeds of a 60-day draft for $800, at 5⁄8% premium, and discounted at 7%?
| $805.00, | face + 5⁄8% premium |
| 9.33, | interest (7%, 60 days) |
| $795.67, | proceeds. Ans. |
Foreign Drafts are usually made payable in the money of the country on which they are drawn.
To find the equivalent of foreign money in United States money and vice versa.
Rule.—Multiply, or divide (as the case may require) the given sum, by the equivalent of a unit in United States money.
Example: What is the cost of a draft on London for £125, reckoning exchange at $4.8665?
125 × 4.8665 = 608.31. Ans. $608.31.
Wishing to remit $182.50 to Ireland, for what amount must I buy a draft on London?
182.50 ÷ 4.8665 = 37.5. Ans. £371⁄2.
How many francs in $100?