ECONOMICS (CBSE/UGC NET)

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 amount of money borrowed from the bank is called the loan, and the extra amount of money paid back to the bank other than the loan is called the interest.

Detailed explanation-3: -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-4: -The correct option is A principal. The money borrowed or lent out for a certain period is called the principal.