pamatsummu

Pamatsummu, in Estonian financial terminology, refers to the principal amount—the original sum of money borrowed or deposited, excluding interest, fees, and inflation adjustments. It is the reference value used to compute interest and to schedule repayments or returns.

In loans and credit, pamatsummu is the loan principal. Interest is charged on this amount, either at a fixed or variable rate, and repayments typically reduce the pamatsummu over time. The remaining balance of the pamatsummu after each payment represents the outstanding loan principal. In some contracts, interest that is not paid on schedule may be capitalized, increasing the pamatsummu until it is paid later.

In deposits and investments, pamatsummu is the amount initially deposited or invested. It earns interest or returns according to the agreed rate and compounding frequency. With compounding, the pamatsummu can grow as interest is added to the base, whereas simple interest yields a fixed amount of interest based on the original pamatsummu.

Variations and considerations: pamatsummu can change due to additional borrowings, partial repayments, or capitalized interest. In accounting and financial reporting, distinguishing the pamatsummu from accumulated interest and fees is important for assessing net exposure, liquidity, and repayment progress. Overall, pamatsummu represents the core monetary value on which financing costs or investment gains are calculated.