Financial calculation revision

What is a promissory note?

• A legal document that outlines a promise to repay a loan

• A receipt for a financial transaction

• A business contract for selling goods

• A certificate of deposit

When is a promissory note used?

• Only for business loans

• When lending or borrowing money under agreed terms

• Only for bank transactions

• When purchasing property

Who is the debtor in a promissory note?

• The person lending the money

• The person borrowing the money

• The financial institution

• The legal advisor

Which of the following is an essential element of a promissory note?

• The lender’s home address

• Loan amount, interest rate, and maturity date

• The borrower’s employment history

• The reason for borrowing money

What can a lender do if the borrower fails to repay the loan?

• Cancel the loan without consequences

• Take legal action to recover the amount

• Ignore the issue

• Reduce the interest rate automatically

Explain the importance of a promissory note in financial transactions.

Evaluate responses using AI:

OFF

List the steps a lender should take if the borrower does not repay the loan on time.

Evaluate responses using AI:

OFF

A promissory note is a legally binding agreement.

• True

• False

The payee in a promissory note is the person who receives the repayment.

• True

• False

A promissory note can only be issued by banks.

• True

• False