Purchase Solution

Approach to Compute Cost of Promissory Note

Not what you're looking for?

Ask Custom Question

ABC company draws a promissory note with a face value of $ 100,000. It is issued on 1st July and matures on 31st July
a) What is the interest rate if drawer receives $99,023?
b) How much is obtained by drawer if the interest rate is 12% p.a.?

Purchase this Solution

Solution Summary

The solution discusses the approach to compute the cost of promissory note.

Solution Preview

See the attached file.
Cost of promissory note finance

Promissory note is a short term financial instrument whereby the borrower ( drawer) promises to repay the face value, at maturity to the holder. The cost of promissory note can be computed in the following manner:
1) The amount of interest will be equal to the maturity or face value( V) minus ...

Purchase this Solution

Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Operations Management

This quiz tests a student's knowledge about Operations Management

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.