LESSON 20-1 Promissory Notes 4/25/2018 LESSON 20-1 Promissory Notes

USES OF PROMISSORY NOTES page 589 1. Number 4. Time of a note 2. Date of a note 3. Payee 5. Principle 6. Interest rate 7. Maturity date 8. Maker LESSON 20-1

INTEREST ON PROMISSORY NOTES page 590 Interest for One Year Interest for One Year = Time in Years × Interest Rate Principal $20,000.00 × 6% × 1 = $1,200.00 Interest for Fraction of Year Interest for Fraction of Year = Time as Fraction of Year × Interest Rate Principal $20,000.00 × 6% × 90 360 = $300.00 LESSON 20-1

INTEREST ON PROMISSORY NOTES page 590 Maturity Value Maturity Value = Interest + Principal $20,000.00 + $300.00 = $20,300.00 LESSON 20-1

MATURITY DATE OF PROMISSORY NOTES page 591 May 18, 90-Day Note May18–May 31 13 days June 30 days July 31 days August 1–August 16 16 days Total 90 days 1 2 3 4 1. Subtract the date of the note from the number of days in the first month. 2. Add 30 days for June. 3. Add 31 days for July. 4. Add only 16 days in August. LESSON 20-1

TERMS REVIEW number of a note date of a note payee of a note page 592 number of a note date of a note payee of a note time of a note principal of a note interest rate of a note maturity date of a note maker of a note promissory note creditor notes payable interest maturity value LESSON 20-1