The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1922-08-26


Iotal .91UO.OU
He will give the company mort
gage for $1,000 and there will be i'm
mediately endorsed thereon as pay
ments 500. He must then repay the
remaining 5000 in monthly INSTALL
ments of 81 per month on principal,
plus one-twelfth of one years inter-
est at per cent, on the money re-
naming due at the beginning of each
year. Tis first payment, made in
January 1923 would therefore be 81
on principal and one-twelfth of three
per cent of 5000, which equals 1925,
making total of 1925. Following
out the payments as required by the
contract he will have fully paid the
loan in September 1888. This Dor
rover will have paid a rate of inter-
est slightly in excess of three per
cent, due to the fact that interest is
computed at three per cent on the en-
| tire balance remaining due at the be-
ginning of each year while as a mat
ter of fact monthly payments of 81
per month are made on principal. In
other words. the company has the use
each year of 81 of the borrowers
money for twelve months, ST for elev-
en- months, 81 for ten months and So
| or down to one month, upon which the
borrower is paying the company three
per cent. that is, the borrower is pay
ing interest upon his own money while
it is in the treasury of the company.
| The interest amounts to S1.36 per
year, or total of S14.5O during the
entire life of the loan and the Dor
rover is therefore paying S14.50 more
than the interest on his loan would
amount to at three per cent. 1t should
be borne in mind also that in addition
10 this the borrower paid 500 before
receiving the loan and that the COM
pany had the use of that money for
short period of time 1t is therefore
clear that the holder of contract No.
l will pay more than three per cent
for his money.
Contract holder No. 1 is the most
favored of all and he could be men,
Der of the company.
| Contract No. so. There will be a
sufficient amount in the trust fund to
make loan of $1,000 to the holder of
Contract No. so in December 1925. At
that time this contract holder will
have paid to the company in monthly
payments of SO each, Al payments
aggregating S410. He must give a
mortgage for $1,000 adequately secur-
ed as provided by the contract and
there will be Immediately endorsed as
paid thereon $41O. The remaining
$500 is to be repaid in monthly Install
ments of 81 per month on principal
plus one-twelfth of one years inter-
est at three per cent on the total
amount due at the beginning of each
year. This loan will be fully paid il,
January 1888, and the borrower will
! nave DdlO DIS 1HLSIcSG p f4soA- L HIS DOI -
rover will have paid a rate of interest
in excess of three per cent due as in
the case of contract No. l, to the
manner of computing interest on the
full amount due at the beginning of
the year. In case of contract No. so,
this amounts to total during the life
of the loan of 1852. The borrower
paid SO per month for Al months for
which he has received no interest. The
interest on the payments made by him
to the company before receiving the
loan computed at four per cent COM
pounded annually would amount to
approximately $1,000. The contract
holder therefore pays for the loan of
$500 the following amounts:
Interest actually paid under the
contract E. 71.32
Interest on the 81 monthly in
stallments mentioned above. 9.52
Value of the use of contract
holders money paid to the
comuany before loan (4%).. 1880
| Total Observation-Disclosures .S111.34
The company receives the equiva-
lent of S111.34 as interest on loan of
! $500 which is amortized i'm "a months.