Principal
Principal is a financial term that refers to the original amount of money borrowed or invested. It is the amount of money that is used as the basis for calculating interest payments or returns. Principal is also used to refer to the amount of money that is owed on a loan or debt. It is the amount of money that must be paid back to the lender or investor, plus any interest or fees that have been accrued.
History of the Term
The term “principal” has been used in finance since the 16th century. It was originally used to refer to the amount of money that was invested in a venture or loan. The term has since evolved to include the amount of money that is owed on a loan or debt. The term is derived from the Latin word “principium”, which means “beginning” or “origin”.
Comparison Table
| Term | Definition |
|---|---|
| Principal | The original amount of money borrowed or invested. |
| Interest | The amount of money charged for the use of borrowed money. |
| Fees | Additional costs associated with a loan or investment. |
Summary
Principal is a financial term that refers to the original amount of money borrowed or invested. It is the amount of money that is used as the basis for calculating interest payments or returns. Principal is also used to refer to the amount of money that is owed on a loan or debt. For more information about this term, you can visit websites such as Investopedia, The Balance, and Bankrate.
See Also
- Interest
- Fees
- Debt
- Loan
- Investment
- Return
- Interest Rate
- Principal Balance
- Interest Payment
- Principal Payment
