How is the term "interest" defined in terms of a senior encumbrancer's goals?

In the context of a senior encumbrancer's goals, the term "interest" refers to the combination of the money lent (the principal) plus any additional amounts that are charged as a return for the loan, typically described as interest in financial terms. A senior encumbrancer, such as a lender with a first mortgage on a property, aims to recover the original loan amount along with interest accrued over time.

When an encumbrancer holds a mortgage, they are primarily concerned with the total amount they will receive upon repayment or through foreclosure. This total consists of the principal they lent plus the interest, which compensates them for the risk and time value of their money. In this way, the correct understanding of "interest" extends beyond just the principal amount—incorporating the additional financial return expected from the loan.

Other options are not suitable because they either focus solely on the principal amount or misrepresent the notion of 'interest' in financial transactions. For example, referencing ownership in the context of what encumbrancers seek is misleading, as they pursue monetary recovery rather than property ownership unless through the foreclosure process.