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Learning Objective 8-4 1) The interest period extends from the original

Question : Learning Objective 8-4 1) The interest period extends from the original : 1412214

 

Learning Objective 8-4

 

1) The interest period extends from the original date of the note to the maturity date.

 

2) The maturity value of a note is the sum of the principal minus interest due at maturity.

 

3) If the maker of the note fails to repay the borrowed amount on the maturity date, the note is said to be dishonored.

4) Interest rates are generally stated on a monthly basis.

 

5) While counting the date of maturity of a note, the date of issue of the note should be omitted.

 

6) The entity that signs the promissory note and promises to pay the required amount is the ________.

A) maker of the note

B) banker of the note

C) holder of the note

D) payee of the note

 

7) The entity to whom the promise of future payment is made for a promissory note is the ________.

A) maker of the note

B) endorser of the note

C) banker of the note

D) payee of the note

 

8) Which of the following exists if the maker of a promissory note fails to pay the note on the due date?

A) a discounted note

B) a depreciated note

C) an amortized note

D) a dishonored note

9) The maturity date for a six-month note issued on January 15 would be ________.

A) July 15

B) July 14

C) July 16

D) July 10

 

10) What is the maturity value of a 3-month, 10% note for $40,000?

A) $42,000

B) $44,000

C) $41,000

D) $40,000

$40,000 + $1,000 = $41,000

 

 

 

 

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