ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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owner of the account
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primary investor in the account.
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original amount of money deposited for investing
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amount of money paid out of the earnings.
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Detailed explanation-1: -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. At the end of 10 years, your account balance will have grown to $6, 500.
Detailed explanation-2: -The principal is the total amount borrowed from a lender or the initial amount invested. In other words, it is the original sum of money that has been borrowed or invested.
Detailed explanation-3: -Your principal is money in your possession that can earn interest or dividends.
Detailed explanation-4: -Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”
Detailed explanation-5: -Interest: Is the amount of money paid or earned for the use of someone else’s money (loan). A bank or other financial institution is usually who will pay out or receive the interest. SIMPLE INTEREST: Interest paid only on the initial principal of a savings account or loan.