ECONOMICS
FINANCIAL MARKETS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the ability to be used as, or directly converted into cash
|
|
|
the price paid for the use of borrowing money
|
|
|
amount of money borrowed
|
|
|
None of the above
|
Detailed explanation-1: -In the context of borrowing, principal is the initial size of a loan-it can also be the amount still owed on a loan. If you take out a $50, 000 mortgage, for example, the principal is $50, 000. If you pay off $30, 000, the principal balance now consists of the remaining $20, 000.
Detailed explanation-2: -The correct option is A principal. The money borrowed or lent out for a certain period is called the principal.
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).