Which is true about principle?

Question

It is a percentage of the amount you borrow over time
It is a simple way to compare all the various elements of different loans
It is the amount you borrow
It is everything you pay in addition to repaying the amount you borrow

Answer 1

The statement that is true about "principle" is:

It is the amount you borrow.

In finance, the principal refers to the original sum of money borrowed in a loan or invested, excluding any interest or additional fees. The other options describe different aspects related to loans but do not accurately define what principal is.