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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Compound Interest
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Seed Money
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Detailed explanation-1: -The original investment or the borrowed amount (i.e. loan) is known as the principal . The amount of interest indicates the increase between principal amount invested or borrowed and the final amount received or owed.
Detailed explanation-2: -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-3: -Principal is the money that you originally agreed to pay back. Interest is the cost of borrowing the principal. Generally, any payment made on an auto loan will be applied first to any fees that are due (for example, late fees).
Detailed explanation-4: -Principal is also the original amount of investment made in an asset, separate from any earnings or interest accrued. For example, assume you deposit $5, 000 in an interest-bearing savings account.
Detailed explanation-5: -Your principal is money in your possession that can earn interest or dividends.