Financial Terms / principal

# Principal: Loan & Bond Value

Principal is the original sum of money that is borrowed or invested in a financial transaction.

## Formula

``Principal = Loan Amount - Interest``

## How do I calculate the principal?

`It is important to understand how to calculate principal when taking out a loan. The principal amount is the amount of money borrowed. This can be calculated by using a formula such as `Principal = Loan Amount - Interest`. To make the calculation easier, you can use a spreadsheet program such as Sourcetable.`

## What is Principal?

`Principal is most commonly used to refer to the original amount of money borrowed in a loan or put into an investment. It can also refer to the face value of a bond, the owner of a private company, or the chief participant in a transaction.`

## What is Bond Principal?

`Bond principal is the original sum of money borrowed or put into an investment.`

## What is Investment Principal?

`Investment principal is the amount of money invested in an investment.`

## What does Principal refer to in Contracts and Contractual Ventures?

`Principals are the main parties involved in the transaction.`

## Key Points

How do I calculate principal?
`Principal = Loan Amount - Interest`
Principal: Sum of Money Borrowed or Put Into an Investment
Principal is the original amount of money put into an investment, whether it be a bond, private company, or any other form of transaction. This sum of money is the base for the investment, and will be used to calculate returns.
Principal: Face Value of a Bond
The principal of a bond is the original amount of money that was borrowed or put into the bond. This sum of money is used to calculate the interest rate and other values associated with the bond.
Principal: Owner of a Private Company
In the context of a private company, the principal is the owner of the company. This person is responsible for making decisions regarding the company's finances and operations.
Principal: Chief Participant in a Transaction
The principal of a transaction is the main person involved in the deal. This person is responsible for negotiating the terms of the transaction and ensuring that both parties are satisfied with the outcome.
Investing
When it comes to investing, the principal is the original amount of money invested in an asset. This sum of money will be used to calculate returns on the investment.