In a periodic payment note,the amount borrowed is equal to the:
A)face value of the note plus interest expense calculated at market rate
B)face value of the note less interest expense calculated at market rate
C)face value of the note less the discount on note payable
D)face value of the note

Question

Quizplus · Accepted Answer

In a periodic payment note, the borrower receives the face value of the note upfront, and then repays the principal amount along with interest in periodic payments over the life of the note. Therefore, the amount borrowed is equal to the face value of the note, as stated in option D. The other options involve calculations related to discount or interest expense, which do not reflect the actual amount borrowed.

In a Periodic Payment Note,the Amount Borrowed Is Equal to The