ECONOMICS

Detailed explanation-1: -Principal is also the original amount of investment made in an asset, separate from any earnings or interest accrued.

Detailed explanation-2: -Principal is the money that you originally agreed to pay back. Interest is the cost of borrowing the principal.

Detailed explanation-3: -A loan’s actual balance, excluding the interest owed for borrowing, is called the principal. This is the original amount borrowed from the lender that needs to be repaid, in addition to all the other costs of borrowing that amount (interest, insurance, and taxes).

Detailed explanation-4: -Loan principal applies to all kinds of debt, be it a mortgage, car loan, business loan, or credit card balance. It includes the exact amount borrowed with the inclusion of interest charges, fees, and additional charges that the lender imposes.

Detailed explanation-5: -The original principal balance on a loan is the amount of the loan before any payments are made. This means that a loan in the amount of $130, 000 will have an original principal balance of $130, 000.