Final answer:
A promissory note is an instrument containing an acknowledgment that a bank has received a sum of money and a promise by the bank to repay the sum of money. It is a legally binding document used in various financial transactions.
Step-by-step explanation:
A promissory note is an instrument containing an acknowledgment that a bank has received a sum of money and a promise by the bank to repay the sum of money. It is a legally binding document in which the borrower promises to repay the loan according to the terms stated. A promissory note can be used for various purposes, such as obtaining a loan or financing a purchase.
For example, let's say a student borrows money from a bank to pay for their tuition fees. The bank would issue a promissory note that outlines the amount borrowed, the interest rate, and the repayment schedule. By signing the promissory note, the student acknowledges the debt and agrees to repay the loan as documented.