Saturday, October 11, 2008

Promissory Note

For me this topic is quite easy to understand.

A promissory note is a written promise made by one person or party to repay a loan or debt on a specified future date to another person or party.
The main features of a promissory note are as follows:
-Maker
The maker is the person that signs the note

-Payee
The payee is the person to whom the payment is to be made

-Date of the note
Is the date on which the note is made

-Term of the note
Is the length of time until the note is due for payment

-Face value
Is the amount stated on the note

-Maturity value

Is the total sum of money which the payee will receive on the maturity date

-Maturity date

Is the date on which the maturity value is due

Example :
In the promissory note above,

a) The maker is Siti Nurhalijah

b) The payee is Britney Spears


c) Maturity value of the note,
Maturity value = face value + interest due

= 2500 + 2500 x 0.06 x 60/360

= Rm2525

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Examples of promissory note,

(This empty promissory note above is from the year 18xx)



(This promissory form above is from THE BANK OF UNITED STATES)



I think that's all for this topic.

Till then,
Zamir


5 comments:

Faisal Admar said...

now this post make me puzzled. what is the diff between this one and normal cheque?

Zamir said...

faisal : well, this one is called promissory note. promissory came from the word promise. this note is a written promise made by one person to repay a loan or debt on a specified future date to another person. understand?

Faisal Admar said...

ok. but if the person couldn't manage to do so, what is the consequence?

Zamir said...

seriously, i don't know abt that!

Anonymous said...

they will have to change the date of the contract with more interest rate. if not the debtor can be imprisoned.

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