ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Principal is the money that you originally agreed to pay back. Interest is the cost of borrowing the principal.

Detailed explanation-2: -The sum of money you deposit into a savings account or borrow from a bank is called the principal. The fee to borrow money is called interest.

Detailed explanation-3: -Interest is the monetary charge for borrowing money-generally expressed as a percentage, such as an annual percentage rate (APR). Interest may be earned by lenders for the use of their funds or paid by borrowers for the use of those funds.

Detailed explanation-4: -Interest is the money you owe when borrowing or receive when lending. Lenders calculate interest as a percentage of the loan amount. Consumers can earn interest by lending money (such as through a bond or certificate of deposit) or depositing funds into an interest-bearing bank account.

Detailed explanation-5: -interest (n.) The earlier Middle English word was interesse (late 14c.), from Anglo-French interesse “what one has a legal concern in, ” from Medieval Latin interesse “compensation for loss, ” noun use of Latin interresse (compare German Interesse, from the same Medieval Latin source).