def principal_component(amount, rate, years, periods):
    """
    Calculates the principal compouding component of a financial application.

    Parameters
    ----------
    amount : float
        The principal component amount, i.e., the initial investment.
    rate : float
        The annualized compouding interest rate.
    years : int
        The number of years of the application.
    periods : int
        The number of compounding periods per years.

    Returns
    -------
    out : float
        The value of the principal components after the given years.
    """
    return amount * (1 + rate / periods) ** (years * periods)
