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A promissory note is a contract where the buyer (borrower) promises to repay the lender a specified amount, such as one million dollars, typically in structured payments. For example, the borrower may agree to pay back five thousand dollars monthly at a two and a half percent interest rate over a duration of 30 years, with payments due on the first of each month. The details laid out in the promissory note formalize the agreement, clearly defining the obligations of both the borrower and the lender.