In a scenario where Borrower A has a $100,000 30-year loan at 5% and Borrower B has a $100,000 15-year loan at 5.5%, who will have paid more principal at the end of their respective loan terms?

In this scenario, both Borrower A and Borrower B have loans for the same principal amount of $100,000, although the terms and interest rates of their loans differ. Borrower A has a 30-year loan at an interest rate of 5%, and Borrower B has a 15-year loan at an interest rate of 5.5%.

The principal amount of a loan refers to the original sum of money borrowed, and in this case, both borrowers began with $100,000. Importantly, the question specifically asks about the amount of principal paid back, not taking into account the interest paid. Since both loans were initiated with the same principal, at the end of their respective terms, each borrower will have paid back that same $100,000 in principal.

While the interest payments will differ due to the different terms and rates, impacting the total amount paid over the life of each loan, the principal amount paid remains the same. Thus, both Borrower A and Borrower B will have paid the same amount of principal by the end of their loans. This leads to the conclusion that both borrowers pay back the same principal amount, validating the correct answer.