ROCHELLE A.

CALUBONG
• Define what is a promissory note.
• Identify the given data in a promissory note
(simple interest note).
• Calculate for the maturity date of a simple
interest note.
• Calculate the simple interest and the maturity
value of a simple interest note.
• Solve problems involving simple interest note.
 Solve for the following problems.
1. For a loan charged interest in advance, find
the discount interest rate if the proceeds for a
12-month, ₱50,000 loan is ₱45,000.
 1. For a loan charged interest in advance, find
the discount interest rate if the proceeds for a
12-month, ₱50,000 loan is ₱45,000.

Given:
t = 12 month or 1 year
F = ₱50,000
Lp = ₱45,000
d = __________

𝐹 −𝐿𝑝 50,000 −45,000 50,000 −45,000 5,000

d= = = =
𝐹𝑡 45,000(1) 45,000(1) 45,000

5,000
= 0.11 The discount interest rate
=
45,000 is 11%.
 Solve for the following problems.

2. How much will you receive on the origin date if

you obtain a loan of ₱300,000 due at the end of
3-years at 9% simple discount rate
 2. How much will you receive on the origin date if
you obtain a loan of ₱300,000 due at the
end of 3-years at 9% simple discount rate.

Lp = F(1-dt)
Given:
= 300,000[1-(0.09%)(3)]
t = 3 years
F = ₱300,000 = 300,000(0.73)
d = 9% = ₱219,000
Lp = __________
 Have you heard about
promissory note?
When do we use a promissory
note?
- is a legal document signed by a borrower
to obtain a loan and repay to the lender.
- is a written promise by one party to make
a payment of money at a date in the
future.
- a promissory note allows anyone to act as
a lender.
The person, company or institution that has
borrowed the money and is bound by the
note to pay the money back is called the
Maker or Borrower, while the person,
company or institution that lent the money is
called Payee or Lender.
Maker or Borrower
Payee or lender
- bears the following information aside from
the maker and the payee.

- the calendar date on which

the maker receives the
money lent by the payee.
Origin Date
- stated often times as the definite number of
days or months, which is the time between the
origin date and the maturity date
- corresponds to the principal, and is the amount
of money lent and given by the payee to a
maker on the origin date.
- charged by the payee.
- refers to the due date
on which a borrower
must pay back an
installment loan in full.
 June 15, 2023
Maturity Date = ________________
Interest (Is) = Prt Maturity Value (F) = P + Is
𝟗𝟓
= (75,000)(0.12)( ) = 75,000 + 2,375
𝟑𝟔𝟎
Is = ₱2,375 F = ₱77,375
Payee: Cagayan
_______________________
Mango Plantation Inc.
Maker: _____________
Jun Reyes
May 9, 2023
Origin Date: ____________
Face Value: __________
₱105,000
Simple Interest Rate : ________8%
Term of Note: _______
55-days
Maturity Date: ___________
July 3, 2023
Interest: ___________
₱1,283.33
Maturity Value: __________
₱106,283.33
From the simple note below, give the following:
Payee: Farm
_______________________
Supplies Inc.
Maker: _____________
Jana Bulan
Origin Date: ____________
February 28, 2023

Face Value: __________

₱120,000
Simple Interest Rate : ________18%
Term of Note: _______
105 days
Maturity Date: ___________
June 13, 2023
Interest: ___________
₱6,300
Maturity Value: __________
₱126,300
Solve the following problems.
1. A simple interest notes for ₱28,000 was signed on
May 10, 2023 and was due on September 21 of the
same year. Find the rate charged if its maturity
value is ₱29,500.
2. Determine the interest and the maturity value of
a simple interest note signed on July 17, 2023 and
due on January 5, 2024. The note’s face value is
₱45,000 and it bears a 12.5% interest rate per
annum.
1. A simple interest notes for ₱28,000 was signed on May 10,
2023 and was due on September 21 of the same year.
Find the rate charged if its maturity value is ₱29,500.

Given:
P = ₱28,000 t = May 31-10 = 21
F = ₱29,500 June – August = 92
September = 21
134 days
𝐹 −𝑃 29,500 −28,000 1,500
r= = 134 = 134 = 0.1439
𝑃𝑡 28,000(360) 28,000( )
360

The rate charged is 14.39%

 2. Determine the interest and the maturity value of a simple
interest note signed on July 17, 2023 and due on January 5,
2024. The note’s face value is ₱45,000 and it bears a
12.5% interest rate per annum.
Given:
P = ₱45,000 t = July 31 – 17 = 14
r = 12.5% Aug. - Dec. = 153
January =5
172 days
172
Is = 𝑃𝑟𝑡 = (45,000)(0.125)( ) =₱𝟐, 𝟔𝟖𝟕. 𝟓
360
F = P + Is = 45,000 + 2,687.50 = ₱47,687.50
The simple interest is ₱𝟐, 𝟔𝟖𝟕. 𝟓 &
the maturity value is ₱47,687.50
 What is a promissory note?

- is a written promise to make a payment of money

at a date in the future.
- allows anyone to act as a lender
 What are the important data indicated in
a simple interest note?

Payee Term of a Note Maturity Value

Maker Face Value Simple Interest

Origin Date Interest Rate Maturity Date
ROCHELLE A. CALUBONG
• Compare the bank discount note and the
simple interest note.
• Identify the given data in a promissory note
(bank discount note).
• Solve for the maturity date of a bank discount
note.
• Calculate the discount interest and the loan
proceeds of a bank discount note.
• Solve problems involving bank discount note.
 Bank Discount Note
- Sometimes referred to a noninterest-bearing note.
- Here, the amount stated on the note, the face value
is its maturity value, and it is on this that the interest
is computed and charged in advance.
- The interest rate here quoted is the discount interest
rate. The money received by the maker on the
origin date is the loan proceeds. In this case, the
interest is subtracted from the maturity value to
obtain the proceeds.
Simple Interest Note Bank Discount Note
Payee Payee
Maker Maker
Term of the note Term of the note
Origin Date Origin Date
Face Value (Principal) Face Value (Maturity Value)
Maturity Date Maturity Date
Interest Interest in Advance
Simple Interest Rate Discount Interest Rate
Maturity Value Loan Proceeds
Interest in Advance (discount interest)
- the process of finding the value of a note before it
matures
Loan Proceeds
- the value of the note after discount.
 Face Value (Maturity Value) Origin Date

Term of the Note

Discount
Interest
Rate
Payee

Maker

Maturity Date= June 30-20=10 Id = Fdt Lp = F – Id

July = 31 45
= 25,000(0.15)( ) = 25,000 – 468.75
August = 4 360
= ₱24,531.25
45 = ₱468.75
Payee: _______________________
Banco De Oro
Maker: _____________
Ben Yap
Origin Date: ____________
August 19, 2023
Face Value: __________
₱112,000
Discount Interest Rate : ____ 15%
Term of Note: _______
85-days
Maturity Date: _______________
November 12, 2023
Interest in Advance: ___________
₱3,966.67
Proceeds: __________
₱108,033.33
Payee: _______________________
Producers Bank
Maker: _____________
Peter Javier
Origin Date: ____________
October 23, 2022

Face Value: __________

₱67,000
Discount Interest Rate : ____ 8%
Term of Note: _______
153 days
Maturity Date: _______________
March 25, 2023
Interest in Advance: ___________
₱2,278
Proceeds: __________
₱64,722
Solve the following problems.
1. How much interest was deducted in advance at
14.4% on a ₱20,000 bank discount note dated at
April 16, 2023 and due to mature on December 16,
2023? What was the proceeds on the origin date?
2. Ted Aggarao signed a ₱19,000 bank discount
note. If the proceeds were ₱17,890 and the term
was 3 months, at what rate was interest charged
in advance?
1. How much interest was deducted in advance at 14.4% on a
₱20,000 bank discount note dated at April 16, 2023 and due to
mature on December 16, 2023? What was the proceeds on the
origin date?

Given:
F = ₱20,000 t = April 30-16 = 14
d = 14.4% May-November = 214
December = 16
244 days
244
Id = 𝐹𝑑𝑡 = 20,000(0.144)( )
360 Lp = F - Id
= ₱1,952 = 20,000 – 1,952
= 18,048
2. Ted Aggarao signed a ₱19,000 bank discount note. If the
proceeds were ₱17,890 and the term was 3 months, at what rate
was interest charged in advance?
Given:
F = ₱19,000 Lp = ₱17,890
t = 3 months

𝐹−𝐿𝑝 19,000−17,890 1,110

d= = 3 = = 0.2337
𝐹𝑡 19,000(12) 4,750

𝟐𝟑. 𝟑𝟕%
What type of promissory note is known as the
noninterest-bearing note?

What are the data indicated in a bank

discount note?