1785.
TRACY verʃus WIKOFF,
I
N this caufe the CHIEF JUSTICE laid down the following rule in computing intereft.
M‘KEAN, Chief Juʃtice. The rule of computing intereft muft be fuch, that the intereft of money paid in before the time, muft be deducted from the intereft of the whole fum due at the time appointed by the inftrument for making the payment. For inftance, a bond to pay Ł.100, with the annual intereft at 6 per cent and at the end of the fix months, Ł.50 is paid in. This payment fhall not be apportioned, Ł.3 to the difcharge of the half year's intereft, and Ł.47 to the dimunition of the principal ; fo as to calculate the remaining intereft at 6 per cent upon Ł.53 for fix months ; But the intereft fhall be charged at the end of the year upon Ł.100 ; the payment of Ł.50 fhall then be deducted from the aggregate fum of Ł.106, and he obligor receive a credit for Ł.1, 10 as intereft of Ł.50 fix months.
The reafon and propriety of the rule laid down by the CHIEF JUSTICE, will be evident from a fhort calculation, ftating Obligor and Obligee, as Debtor and Creditor, according to the mercantile form.
Dr. John Stiles, in account with John Nokes, per Contra. Cr.
1784. 1783 January 1. To his bond and 1 July 1. By cafh — —Ł. 50 00year's intereft. Ł.106. 1784 — Jan. 1. By intereft of Ł50 — paid as above — 1100— By balance — — 54 100Ł.106 Ł.106. 00
But if this account were ftated on the contrary principle, it would appear as follows.
Dr. John Stiles, &c. Per Contra. Cr. 1784 1784 July 1. To his bond &6 1 July By cafh 6 mos. mos. interft Ł.103 00 intereft — — Ł.3 00 50 By do. on acct. 1785 of principal — 47 00 Jan. 1. To his bond 53 00 To 6 mos. int. 1 11 9½ 1785 50 00 1 Jan. By cafh — 54 11 9 I Ł.54 11 9⅛ Ł.104.11 9½
So that the Obligor not only pays Ł.1.11 9½ more in the year by the fecond method of calculation ; but the Obligee gains Ł.3 more upon his Ł.100 ; for, if he puts out the Ł.47 when he receives it, at the end of the fix months it will yield Ł. 1.8 2 ½ intereft, which added to Ł. 711 9½, that he has already receives, amounts to Ł.9.
