Final answer:
Promissory note terms are fundamental to understanding financial documents like bonds, defining the obligations and rights between the borrower and the lender. Face value, term, rate, maker, payee, maturity date, and date of issuance are matched with their definitions, providing clarity on each party's role in the agreement.
Step-by-step explanation:
Matching the promissory note terms to their respective definitions is an essential skill in understanding financial documents, particularly bonds. Here are the matched terms with their definitions:
• Face Value: This is the amount of money borrowed which the borrower agrees to repay the investor at maturity.
• Term: The length of time that the money is borrowed until maturity.
• Rate: The annual percentage for the cost of borrowing money, also known as the interest rate.
• Maker: The company or individual issuing the note/borrowing the money.
• Payee: The company or individual extending the credit or the investor.
• Maturity Date: The date that the principal and interest are due to be repaid to the investor.
• Date: The date that the note was issued, indicating when the obligation began.
The terms above are crucial for understanding the obligations and rights of both the borrower and the lender in a financial agreement. Knowing the face value, term, rate, maker, payee, maturity date, and the date of issuance helps both parties to compute a bond's present value, which indicates the current worth of the future cash flows from the bond.