LESSON 20-1

1. LESSON 20-1 Promissory Notes

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

3. Principal Principal × × InterestRate InterestRate × × Time inYears Time as Fraction ofYear = = Interest forFraction of Year Interest forOne Year 90 360 INTEREST ON PROMISSORY NOTES page 590 Interest for One Year $20,000.00 × 6% × 1 = $1,200.00 Interest for Fraction of Year $20,000.00 × 6% × = $300.00 LESSON 20-1

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

5. 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 MATURITY DATE OF PROMISSORY NOTES page 591 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

6. 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 TERMS REVIEW page 592 LESSON 20-1