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:
The maker is the person that signs the note

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


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,


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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Business mathematics is mathematics used by commercial enterprises to record and manage business operations. Mathematics typically used in commerce includes elementary arithmetic, such as fractions, decimals, and percentages, elementary algebra, statistics and probability. Business management can be made more effective in some cases by use of more advanced mathematics such as calculus, matrix algebra and linear programming.

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