THE BOROUGH LOAN PROPOSALS.

Timaru Herald, Volume LXXV, Issue 11579, 15 October 1901, Page 3

THE BOROUGH LOAN PROPOSALS.

To the Editor of the "Timaru Herald." Sir;-lt was fortunate for your corre- ■ "Anxious" that he had a boy afhand in Xm'he had sufficient faith in the matter'of figures, to allay [ the togh which my figures gave himself and the missus " The boy has been very free m Ws opinion about my blundering methods J In figure I, and guessed that I dreamt them , Well if I had dreamt the... I should not hkve asked you, Sir, to print them as wide awake calculations. • I interest." Your can 'iudge for themselves of this boys ability its a mathematician when he tells Ins father about " double compound interest. I would ask the ratepayers before they decide between the alleged boy's figures and mine to ask themselves, What is compound interest ? I computed that the proposed loan would average- £SO to each ratepayer, and how I arrived at my figures is as follows: Suppose I were one of the subscribers to that loan to the extent of £SO. At the end of the first year if I cet 5 per cent, on my money, I shall. receive £2 10s interest. I invest that interest at 5 per cent, per annum, and next year mv income is a'i 12s 6d; again I invest the "interest as before, and my income is £2 15s lid; and so I go on increasing mv income, at the expense ol the borrower! until at the end of 39 years, I assert. I shall have lifted, in interest alone, £315. For the sake of brevity I made mv calculations annually. If it is computed every six months, as the borough rates are paid, and invested accordingly, the sum paid will be somewhat higher. Most of us have heard of the man who, on getting his horse shod, made a bargain with the smith to charge a farthing for the first nail, so much more for the second, and so on until the horse was shod.

It looked very simple and cheap, but he was surprised to find on l lie horse being shod that to pay the smith would cost more than the horse was worth. Let us hope that no owner of a cottage in Timaru will lose his property in the same way. I am, etc., A RATEPAYER. Timaru, October 14th, 1901.

To the Editor of the "Timaru Herald." Sir, Your correspondent " Anxious" states that one per cent, sinking fund would take 399 years to pay off a loan of £50,000 if invested at 4£ per cent. He also states that " Ratepayer" must have "dreamt his figures." '"Ratepayer" may have been dreaming for all I know, but " Anxious " must have had a nightmare. " Anxious'" estimate of 1 per cent, sinking fund on a £50,000 loan for 399 years would provide sufficient funds to extend the breakwater to Lyttelton, pay off the colony's debt, likewise the Chinese indemnity, and lend John Bull, Esq., the money to pay the cost of the Boer war, etc., etc. £1 per annum invested for 50 years at 4£- per cent, compound would p-mount to £l7B 10s. Work it out, Mr "Anxious." I am, etc., SINKING FUND. To the Editor of the "Timaru Herald." Sir, —In my letter signed "Anxious," about the Mayor's loans, your printer has altered the 39 years to 399 years. This makes a difference. Seeing that I invited " Ratepayer" to correct the boy's figures, if wrong, this gives "Ratepayer" a, big chance. I am, etc., ANXIOUS. Timaru, 14th October, 1901.