An instrument given by a bank on behalf of a buyer to pay back the bank of the seller a given sum in a given time is called a(n)

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A letter of credit is an instrument given by a bank on behalf of a buyer that promises to pay a given sum to the bank of the seller within a specified time. It is commonly used in international trade to ensure that payment is made to the seller before the goods are shipped. A promissory note is a written promise to pay a debt, a draft is a written order to pay a certain amount of money, and an international IOU does not exist as a recognized financial instrument.

An Instrument Given by a Bank on Behalf of a Buyer