Karteikarten
Chapter 11 Key Terms
Karten in diesem Stapel (17)
- 1Bank DiscountThe amount of interest charges by a bank on a note. (Maturity Value x Bank Discount Rate x Number of days bank holds note/360)
- 2Bank Discount RatePercent of interest.
- 3Contingent LiabilityPotential liability that may or may not result from discounting a note.
- 4Discount PeriodAmount of time to take advantage of a cash discount.
- 5Discounting a NoteReceiving cash from selling a note to a bank before the due date of a note. Steps include; 1. calculate maturity value 2. calculate number of days bank waits for money 3. calculate bank discount 4. calculate proceeds
- 6Effective RateTrue rate of interest. The more frequent the compounding, the higher the effective rate.
- 7Face ValueAmount of insurance that is stated on the policy. it is usually the maximum amount for which the insurance company is liable.
- 8Interest-Bearing NoteMaturity value of note is greater than amount borrowed since interest is added on.
- 9MakerOne who writes the note.
- 10Maturity DateDate the principal and interest are due.
- 11Maturity Value (MV)Principal plus interest (if interest is charged). Represents amount due on the due date.
- 12Non-interest Bearing NoteNote where the maturity value will be equal to the amount of money borrowed since no additional interest is charged.
- 13PayeeOne who is named to receive the amount of the check.
- 14ProceedsMaturity value less the bank charge.
- 15Promissory NoteWritten unconditional promise to pay a certain sum (with or without interest) at a fixed time in the future.
- 16Simple Discount NoteA note in which bank deducts interest in advance.
- 17Treasury BillLoan to the federal government for 91 days (13 weeks), 182 days (26 weeks), or 1 year.
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- Beschreibung
- Chapter 11 discusses promissory notes, discount notes, discount process, and maturity value.
- Erstellt von
- Theresa Horstmann
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- 42
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