Asked by Hassen Ayachi on Jun 15, 2024
Verified
Explain the difference between a promissory note, a line of credit, and a revolving credit agreement.
Revolving Credit
Revolving credit is a flexible funding option where credit is automatically renewed as debts are paid off, up to a certain limit.
Promissory Note
A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.
Line of Credit
A Line of Credit is a flexible loan from a bank or financial institution allowing the borrower to draw funds up to a specified limit at any time.
- Understand the difference between various financial instruments including promissory notes, lines of credit, and revolving credit agreements.
Verified Answer
Learning Objectives
- Understand the difference between various financial instruments including promissory notes, lines of credit, and revolving credit agreements.
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