Question

Which statement best defines the term principal?
A. It is an arrangement in which you buy now and pay later.
B. It is the annual rate of interest a bank charges for a loan.
C. It is the original amount of money the bank loans the borrower.

Answer 1

C is the answer......

Answer 2

The correct answer for the given question above would be option C. The statement that best defines the term principal is the original amount of money the bank loans the borrower. It is the total amount of money borrowed, which is separate from the interest.