Basic Terms
Principal: The money borrowed by the borrower from the lender. The principal remains the same throughout the loan period.
Rate of Interest: Rate at which the principal is charged.
Time: The period for which the money is borrowed.
Interest: The extra money paid by the borrower to the lender for the use of money.
Amount: The money returned by the borrower at the end of the certain period.
Amount = Principal + Interest
Interest = Amount - Principal
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