A promise to pay at some time in the future

Question

Quizplus · Accepted Answer

A promise to pay at some time in the future is a form of debt, such as a loan or a bond, where the borrower agrees to pay back the lender at a specified future date. This promise represents the present value of the future payment, taking into account the time value of money and expected interest rates. Therefore, A is the best choice as it accurately describes the nature of this promise. B is incorrect as a bond is a specific type of debt instrument, not a general term for promise to pay. C is incorrect as the interest rate is typically included in the terms of the promise to pay, but it is not the same thing as the promise itself. D is incorrect as a dividend is a payment made to shareholders of a company, not a promise to pay by a borrower.

A Promise to Pay at Some Time in the Future