Principal

Principal

Original corpus, usually purchasing power in the form of money available for investment, on which interest, dividends, and capital gain are calculated.

Principal can be confused with capital, which may consist of anything that can enhance a person's power to perform economically useful work.

Also see time value of money, for a more detailed description of how these returns may be analyzed relative to principal.

From principalis: "first in importance," or "money on which interest is paid"; [1]

Sumflow 14:19, October 16, 2010 (PDT)

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