MAT112 [2: Bank Discount and Promissory Notes]

Which of these statements about promissory notes is correct?

(Hint: 2 answers)

• A written promise made by the borrower to repay a loan to the payee

• A promissory note is a documented promise to repay borrowed money

• A promissory note is not a negotiable instrument.

• A promissory note are issued on long-term basis

• face value

• maturity value

• final discount

face value is referring to the

• amount of debt with interest

• the amount borrowed

• amount received on the maturity date

• accumulated amount on due

What do you call the time between the discount date and the maturity date?

• term of note

• term of discount or discount term

If Haimah wrote a promissory note, who is Haimah?

• Borrower

• Payee

• Lender

The amount received by the borrower after the interest in advance is deducted from the amount of loan?

• profit

• discount

• proceeds

• interest

What is the other keywords for proceeds?

(Hint: 3 correct answers)

• Receive

• Borrow

• Require

• Needs

What is another term for interest in advance?

• simple interest

• bank discount

• trade discount

• compound interest

A 60-day promissory note dated 27 Nov 2020 had a face value of RM 2000. The simple interest rate charged was 6.6% per annum. Determine the maturity value of the note.

• 26 Jan 2021

• RM 2022

• RM 2000

• RM2021.70

• RM2021.64

In the given promissory note, who is the debtor?

• Gina Bravo

• Jaime dela Cruz