Match each of the following terms A through F with the appropriate definitions 1 through 6. A. Maker of a note
B. Interest
C. Promissory note
D. Payee of a note
E. Principal of a note
F. Dishonoring a note
1. A written promise to pay a specified amount either on demand or at a definite future date.
2. The cost of borrowing money for a borrower, alternatively the profit from, lending money for a lender.
3. One who signs a note and promises to pay it at maturity.
4. The one to whom the promissory note is made payable.
5. Refers to a note maker's inability or refusal to pay the note at maturity.
6. The amount that the signer of a note agrees to pay back when the note matures, not including interest. Defining promissory notes.

Solution :

A. Maker of a note: 3. It is the person who signs the note and promises to pay.

The maker puts his signature and promises to pay the bearer the amount of the value of the note.

B. Interest: 2. It is the cost of borrowing money and profit for lender.

It is the extra money that the borrower pays to the lender. It is like an income to the lender.

C. Promissory note: 1. It is a promise to pay the signed sum.

It is a note that promises to pay the amount of the value.

D. Payee of a note: 5. It is the person to which the note is payable.

Payee is the individual who is the owner of the note.

E. Principal of a note: E. It is the amount signed to be paid back excluding interest.

It is the basic amount signed to be paid to the bearer.

F. Dishonoring a note: 5. It is inability to pay the signed sum.

Dishonoring is refusal to pay or the inability to pay the value for the signed amount.

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