The amount of money borrowed, or the amount still owed on a loan, excluding interest.

• A. Interest
• B. Liability
• C. Principal
• D. Asset

Answer: (C)

Principal is the amount borrowed or the remaining balance on a loan, excluding interest. It represents the core debt itself—the actual money you owe. Interest is the extra cost charged for borrowing and is not part of the principal’s definition, though payments move both: some go to interest and some reduce the principal. The loan balance you see on a statement is the principal outstanding. An asset is something you own, not what you owe, and a liability is the general category of debts; the term that matches “amount borrowed or still owed excluding interest” is principal.