# Promissory Note: Terms & Calculations

Instructions:

question 1 of 3

### What is the role of a promissory note?

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### 2. For a promissory note with monthly payments and an annual interest rate of 6 percent, what is the monthly interest rate that you need to use in this formula?

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This quiz and worksheet give you the chance to calculate monthly and total payments of promissory notes. You will be assessed on your knowledge of the terms involved in writing a loan and your ability to use the monthly payment formula.

## Quiz & Worksheet Goals

Students will have to answer the following types of problems:

• Recall the definition of a promissory note
• Understand what the letters of the monthly payment formula represent
• Determine a monthly interest rate based on annual interest rate and monthly payments
• Calculate the monthly payments of a specific loan
• Determine the total amount paid on a loan after a number of years

## Skills Practiced

• Reading comprehension - draw out the most important information from the related lesson on Terms and Calculations for Promissory Notes
• Problem solving - use acquired knowledge to solve loan practice problems
• Knowledge application - understand how to use the mathematical formula for monthly loan payments based on given information