The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1868-04-01
Building Associations Interest do
fs.* rs M they Pay ?H.a3 1,@ e.5dR


The following communication which we
clip from the Washington Republican, strikes
us as giving the clearest idea of the work
ingslof Building Associations that we have
ever seen or heard. We believe our Associa-
ton, is worked on the same principle. The
| communication says s7 al 80 sl.@oa'5s
At the meeting of the Washington, Build
ing Association on Wednesday evening, The
loans were made as follows: 1'3, ''''-''
81 900 for a bonus Of 'ei s.~ 5''' SLIGO
| 1000 for bonus of. 9i A" ee $50
| 1000 for bonus Of 9'il '.s@'! l''E1 $50
900 for bonus Of t34A nh1e1 i 900
By the rules of. this company, the bonus is
added to the amount loaned and one tenth
Of the sum is payable annually, the annual
payment being divided into twelve parts and
paid monthly. The question has been a good
deal mooted as to what interest these borrow
ers pay on the money borrowed This prob
lem may be solved by taking some fixed rate
Of interest, and seeing what the bonus would
amount to at that rate As ten per cent. is
easily calculated, it will serve as a key to
other rates. '" re- 80
According to the terms Of the proposition,
one tenth Of the sum borrowed is to be paid
every year, and as the shares are 81 900, one
tenth is Just $500 which is to be SO paid
back. If, therefore, the bonus paid is $3.50,
the rate of interest which the bonus indicates
will be exactly ten per cent The first year
the borrower has the use Of 81 600, the IN
terest on which, at ten per cent, is 500
The second year, having paid one tenth of the
principal, he has the use Of 5000, and the in
terest is 500, and so on, diminishing 500
every year, till the last tenth is paid Thus !:
First year, 81 900 for one year at ten per
cent. is 500. ts "s@
Second year, 5000 for one year at ten Der
cent is 500 '''--- ''@t 49, -4'
Third year, $500 for one year at ten per
cent. is $50
Fourth year, 500 for one year at ten per
cent. is $40.
Fifth year, 5000 for one year at ten per
cent. is $50. .'..l.....-,t',.t -.
Sixth year, $500 for one year at ten per
cent. is $50. s'.,f's..t
Seventh year, s4oo for one year at ten per
cent. is $50
Eighth year, $500 for one year at ten per
cent. is $40 80, -.
Ninth year, 5000 for ono year at ten per
cent. is $40. =. F-.S. -f-C, -
Tenth year, 500 fer one year at ten per
cent. is SO. Total $3.50. -. 49,
Now as 10 per cent, gives bonus of $3.50
it is easy to calculate what percentage will be
represented by any other bonus. OF course
20 per cent. will be just double, or S1,100,
and 5 per cent, just half, or $275. -,
The biddings are made at so much per
cent on the amount loaned, and SO, when "a
man bids IS per cent, his bid represents "a
bonus of $3.50 for every 81 900, which is one
share. Hence table may be made as fol-
lows--the sum loaned being ST 600:
'3 per cent, or $3.50 bonus, represents an
interest Of 6 per cent. per annum.
A per cent, or $40 bonus, represents an
interest Of 8 per cent. per annum.
IS per cent, or $3.50 bonus, represents an
interest of 10 per cent, per annum.
sc percent, or $500 bonus, represents an
interest OF II per cent. per annum
n per cent, or $40 bonus, represents an
interest of "A per cent. per annum. @
80 per cent, Or $3.50 bonus, represents an
interest OF l6 per cent. per annum i-@
99per cent, Or $500 bonus, represents an
interest OF Is per cent per annum a
ITO per cent, or 81 400 bonus, represents
an interest OF IS per cent. per annunl.