principal

Principal

(1) The total amount of money being borrowed or lent. (2) The party affected by agent decisions in a principal-agent relationship.

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principal

1. The face amount of a bond. Once a bond has been issued, it may sell at more or less than its principal amount, depending upon changes in interest rates and the riskiness of the security. At maturity, however, the bond will be redeemed for its principal amount. Also called principal amount.

2. Funds put up by an investor.

3. The person who owns or takes delivery of an asset in a trade. For example, an investor is the principal for whom a broker executes a trade.

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Principal. Principal can refer to an amount of money you invest, the face amount of a bond, or the balance you owe on a debt, distinct from the finance charges you pay to borrow.

A principal is also a person for whom a broker carries out a trade, or a person who executes a trade on his or her own behalf.

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principal

(1) One who has permitted or instructed another—called an agent—to act on his or her behalf and according to his or her instructions. (2) One who is primarily liable for an obligation, as opposed to a surety,who is secondarily liable.(3) With a promissory note,the principal is the unpaid balance of the funds borrowed,not including any interest or other fees.(4) In a trust,the property of the trust that generates income.Principal can be real property or personal property.

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Principal

The portion of the monthly payment that is used to reduce the loan balance.

See Amortization.