BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the ability to be used as, or directly converted into cash
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the price paid for the use of borrowing money
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amount of money borrowed
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Detailed explanation-1: -The amount of money borrowed or invested is called as Principal. When you first take out a loan, the principal is the original amount you borrowed. As you pay toward that debt, the principal becomes the outstanding balance on the loan, not including interest and any fees accrued.
Detailed explanation-2: -The principal is the amount of money you borrow when you originally take out your home loan.
Detailed explanation-3: -Principal Amount : Frequently Asked Questions (FAQs) Either you can use a principal amount calculator or the formula for calculating the principal amount; the formula is – P = I/rt, while for determining the interest rate, the expression is – I = P*r*t.
Detailed explanation-4: -The formula to calculate simple interest is: principal x rate x time = interest (with time being the number of days borrowed divided by the number of days in a year). If you borrow a $2, 500.00 loan with an interest rate of 5.00% for a period of one year, the interest you owe will be $125.00 ($2, 500.00 x . 05 x 1).