ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Interest
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Principal
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Term
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Rate
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Detailed explanation-1: -What Is Principal? Principal is most commonly used to refer to the original sum of money borrowed in a loan or put into an investment.
Detailed explanation-2: -Principal is the amount of money a company borrows when it takes a loan. This amount is recorded on a promissory note as proof of the debt owed. In all but the rarest of situations, the borrower must pay interest, which is the lender’s fee for making money available.
Detailed explanation-3: -The correct option is A principal. The money borrowed or lent out for a certain period is called the principal.
Detailed explanation-4: -The home loan principal amount is the amount of money initially borrowed from the lender, and as the loan is repaid, it can also refer to the amount of money still owed. If you avail a home loan of Rs. 50 lakhs, the principal is Rs. 50 lakhs.
Detailed explanation-5: -Money borrowed or lent out for a certain period is called the principal or the sum.