ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Principal is most commonly used to refer to the original sum of money borrowed in a loan or put into an investment. It can also refer to the face value of a bond, the owner of a private company, or the chief participant in a transaction.

Detailed explanation-2: -Principal is the money that you originally agreed to pay back. Interest is the cost of borrowing the principal.

Detailed explanation-3: -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-4: -The principal is the amount of money you borrow when you originally take out your home loan. To calculate your mortgage principal, simply subtract your down payment from your home’s final selling price.