The face value of a note is called the principal

The face value of a note is called the principal -...

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The face value of a note is called the  principal , which equals the initial amount of credit provided.  The  maker  of a note is the party who receives the credit and promises to pay the note's holder. The  maker classifies the note as a note payable. The  payee  is the party that holds the note and receives  payment from the maker when the note is due. The payee classifies the note as a note receivable. 
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Unformatted text preview: Calculating interest . Notes generally specify an interest rate, which is used to determine how much interest the maker of the note must pay in addition to the principal. Interest on short-term notes is calculated according to the following formula: For example, interest on a four-month, 9%, $1,000 note equals $30....
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