in consumer math, is the "principal" what you owe?

Question

bitsm · Answer

so if im paying on a credit card, and the balance is 1853.42 and i pay 400$ for the first month, what do i put as the next principal?

bitsm · Answer

or is it the same and all the other numbers are going down as i pay

thatonegirl_ · Answer

It is the same i believe..

thatonegirl_ · Answer

What formula r u using?

bitsm · Answer

i dont rly know the teacher basically told me this:
multiply what i owe x 15.5% (APR)/ 12
400$ < payment
400- interest = end of month balance

bitsm · Answer

its like a chart with the months and im supposed to fill it out as i 'pay' on it but idk what to put for the principal

thesmartone · Answer

"Principal is the amount of money borrowed or invested." http://www.mathgoodies.com/glossary/term.asp?term=principal

austinl · Answer

Based on the information given I would definitly say it is defining the money borrowed. Think of it like this: you borrow $100 from a rich friend. The next week you go to pay him back and now you owe him $110... The initial ammount is the principle and the additional ammount is the interest. Interest is usually based on a percent of the money owed until it is paid off.

mathmale · Answer

"Principal" refers to "initial amount."
If you deposit $50 in a bank which pays interest on that principal amount, you will earn interest on your initial deposit of $50, and thus will have increasingly more $ in your account as time passes, assuming that you take none out.

If you borrow a certain amount of $ to buy a house, that amount is called your "principal."  If you make monthly payments of "principal and interest," you reduce the original loan amount at the same time you're paying interest.  Part of your payment goes to "pay donw" the principal; the remainder goes to pay the interest due the lender on the $ borrowed.