Principal

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DEFINITION of 'Principal'

1. The amount borrowed or the amount still owed on a loan, separate from interest.

2. The original amount invested, separate from earnings.

3. The face value of a bond.

4. The owner of a private company.

5. The main party to a transaction, acting as either a buyer or seller for his/her own account and risk.

INVESTOPEDIA EXPLAINS 'Principal'

Be sure to take into account the context in which this term is used, as the exact meaning of the term has many variations.

Also referred to as "corpus."

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  5. What does it mean when a bond has a put option?

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