The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1872-01-12
Observation-Disclosures
RICHMOND, January 10, 1872.

Editors of the Richmond Dispatch:
Will YOU be so kind as to explain to one OF
YOUR numerous readers the difference be-
tween discounts and interest or premium !!
4 person cannot lose more than one hundred
per cent. on any purchase he may make, ana
may make many hundred per cent. 1t ap-
pears to me that interest and discount from
one per cent. up to one hundred per cent.
are lust the same. Suppose man buys
goods at (S1) one dollar and sells the SAME
for one dollar and fifty cents, he makes fifty
per cent. If he buys goods at (SI one dol
lar and sells for fifty. cents he loses one-hali,
or fifty per cent. In the first instance he
sells for one-halfabove cost and in the last one
half below cost; and the s;une seems to me to
work good from one per cent. up to ttty or
one hundred per cent. If an article cost
fifty cents and is sold at sixty cents, one-11th
above cost, twenty per cent. is made. II an
article cost fifty cents gnd is sold at forty
cents. one-fifth below cost, twenty per cent.
is lost. If an article cost CS1) one dollar and
is sold at CS2) two dollars, the money is
lafibTed and one hundred per cent. is made.
usap article cost (S1) one dollar and becomes
Wscfth bless. or is stolen, the whole, or one hum
dsaper cent, is lost. n.
-&ll,that OK" says is true, except that he
mistakes percentage for discount. One hun
dred per cent, represents all Of anything
all of any mans property, for instance. he
may loseit. G sthat is one hundred per cent; ;
but he, cannog Rossibly lose more than all
that isl, again, ,s1ne hundred per cent. But
he play, acquire ten times as much property
N4sfA SHAT is, one thousand per cent.
e. upwards, percentage has no limit;
nf, it stops at zero-that is, when
I at zES counted off one hundred. Never!
theless, we often see it stated that the price of
some article has been reduced more than one
hundred per cent.-an absurd statement, and
one that could not possibly be true.
Discount, strictly speaking, is not percent
age, though it purports to. be. Interest is
percentage. To discount note at what is
called six per cent. is to charge interest at the
rate of six dollars on ninety-four dollars,
which is not interest at the rate of six per
cent. at an--per cent. meaning per hun
dred-but at the rate of sac per ntrsety:fo,1r.
Interest differs from discount in that to
charge interest at six per cent. is to charge
six dollars interest on hundred dollars. 1t
is convenient to call the rate of discount a
rate per cont. Indeed, If it were desirable,
as it is not, it would be impossible to change
this commercial phrase.
All the cases cited by OK" are cases of
percentage-that is, so much compared with
100, and necessarily 10 is one-tenth Of a hun
bred whether added to or subsracted from
it. The man who buys horse for $50 and
sells him for $50, gains 20 per cent. and if he
sold it for $40, be would lose only 20 per
cent, because we compare both the profit
and the loss with so. But the difference to
him between selling at 20 per cent. profit
and 20 per cent. loss is fifty per cent, because
sixty is BY fifty per cent. more than forty.