Debt Instrument
Definition: A debt instrument is a type of written promise that someone will pay back borrowed money. It usually includes details about how much money is borrowed, the interest rate, and when the money will be paid back.
Usage Instructions:
You can use the phrase "debt instrument" when talking about financial agreements, investments, or loans.
It is often used in formal or business contexts, so it’s good to know for discussions about money or finance.
Examples:
Simple Example: "When you take out a loan from the bank, you sign a debt instrument that states how much you owe and when you will repay it."
Advanced Example: "Corporate bonds are a common type of debt instrument that companies use to raise capital from investors."
Word Variants:
Debt (noun): The amount of money owed.
Instrument (noun): A tool or device; in finance, it refers to a formal agreement or document.
Different Meanings:
In general usage, "instrument" can mean any tool or device used for a particular purpose (like a musical instrument).
In finance, it specifically refers to documents that represent an agreement involving money.
Synonyms:
Loan agreement
Bond
Promissory note
IOU (I Owe You)
Idioms and Phrasal Verbs:
Summary:
A debt instrument is an important term in finance that refers to a written agreement to repay borrowed money.