When you borrow money from a bank to make a purchase, you must pay back the amount borrowed plus an additional amount known as principal.

Name: When you borrow money from a bank to make a purchase, you must pay back the amount borrowed plus an additional amount known as principal.
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When you borrow money from a bank, the amount borrowed is known as the principal, and the additional amount you must pay back on top of this is called interest.

When You Borrow Money from a Bank to Make a Purchase