Please help!
I am stuck on this question as follows:
Identify each of the following characteristics of promissory notes with an "I" for simple interest note, a "D" for simple discount note, or a "B" if it is true for both.
a> Interest is computer on face value, or what is actually borrowed.
b> A promissory note for a loan usually less than 1 year.
c> Borrower receives proceeds = face value -- bank discount.
d> Maturity value = face value + interest
e> Maturity value = face value
f> Borrower receives the face value.
g> Paid back by one payment at maturity.
h> Interest computed on maturity value, or what will be repaid, and not on acutual amount borrowed.
Please share your opinions.
Thanks so much!
I am stuck on this question as follows:
Identify each of the following characteristics of promissory notes with an "I" for simple interest note, a "D" for simple discount note, or a "B" if it is true for both.
a> Interest is computer on face value, or what is actually borrowed.
b> A promissory note for a loan usually less than 1 year.
c> Borrower receives proceeds = face value -- bank discount.
d> Maturity value = face value + interest
e> Maturity value = face value
f> Borrower receives the face value.
g> Paid back by one payment at maturity.
h> Interest computed on maturity value, or what will be repaid, and not on acutual amount borrowed.
Please share your opinions.
Thanks so much!