Which term best describes the amount of money owed to a lender?

The term that best describes the amount of money owed to a lender is "debt." Debt represents an obligation that requires the borrower to repay the borrowed amount, typically with interest, over time. This financial concept is crucial for understanding personal and business finance, as it encompasses loans, mortgages, and other credit forms where funds are borrowed.

Capital refers to the financial resources or assets used for investment purposes. Equity refers to ownership in an asset, such as shares in a company, which reflects the value of an owner's interest after all liabilities have been deducted. Assets are resources owned by an individual or organization that have economic value, and they can include cash, property, and investments. Each of these terms plays a significant role in financial literacy, but "debt" specifically addresses the amount owed to a lender. Understanding this concept helps individuals manage their finances, make informed borrowing decisions, and maintain a healthy credit profile.