Whats the difference between interest and principal?

Sure, here's the difference between interest and principal:

Principal:

• Principal is the original amount of money invested or borrowed.
• It is the amount of money that the lender or investor initially provides to the borrower.
• Principal is not earned interest; it is the initial investment amount.

Interest:

• Interest is the amount of money paid or earned on an investment over time.
• Interest is calculated as a percentage of the principal amount.
• Interest is paid or received regularly, typically monthly or annually.

Here's an example to illustrate the difference between principal and interest:

• Suppose you invest $1,000 in a savings account that pays 2% interest per year.
• After one year, you will earn $20 in interest, bringing your total to $1,020.
• The principal amount of $1,000 remains the same throughout the year.

In summary, principal is the initial amount of money invested or borrowed, while interest is the amount of money earned on that principal over time.