noun
principal
The amount borrowed or invested, excluding interest.
Each extra payment reduces the principal she owes on her mortgage.
Etymology
The older adjective means chief or primary. In finance, the principal is the original or basic sum distinguished from the interest produced or owed.
More examples
- The loan payment covers both principal and interest.
- He invests $5,000 and leaves the principal untouched.
- Interest is calculated on the remaining principal.
Forms
principal · principals
Similar words
- capital
- Capital more broadly includes money and assets used to generate income.