Eden signs a promissory note payable to the order of First Mortgage Company. The note states that it is payable "with interest at the legal rate." This note is
A) negotiable.
B) nonnegotiable, because it does not specify a rate of interest.
C) nonnegotiable, because it is payable with interest.
D) nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument.

Question

Eden signs a promissory note payable to the order of First Mortgage Company. The note states that it is payable "with interest at the legal rate." This note is​
A) ​negotiable.
B) ​nonnegotiable, because it does not specify a rate of interest.
C) ​nonnegotiable, because it is payable with interest.
D) ​nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument.

Quizplus · Accepted Answer

The promissory note is negotiable because it meets all the requirements of negotiability, including being in writing, signed by the maker, containing an unconditional promise to pay, and payable to the order of a specific person or entity (First Mortgage Company). The fact that it specifies interest at the legal rate does not affect its negotiability.

Eden Signs a Promissory Note Payable to the Order of First