That statement is true For example if you lend $ 100,000 to your friend with 10% interest rate per year, The initial $ 100,000 is the one that you consider as principle. Meanwhile the amount of money that considered as interest is $100,000 x 10% = $ 10,000 per year.
The statement above is correct. The principle or principal amount is the money that one borrows or invests. Both are subject to interest. The interest earned will depend on the terms you agreed to with your bank or financial institution.
