PRINCIPAL SUM Meaning and
Definition
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The term "principal sum" refers to the initial amount of money that is borrowed or invested. It is the original amount that is lent to a borrower or the initial investment made by an individual or company. In the context of borrowing, principal sum represents the total amount of money that is borrowed from a lender, excluding any interest or fees that may be added.
In the case of an investment, principal sum refers to the total amount of money that is initially put into an investment vehicle, such as stocks, bonds, or real estate. The principal sum is the starting point for calculating any potential returns or profits from the investment.
The principal sum is an important concept in finance and economics, as it serves as the basis for determining the overall value and potential growth of an investment or loan. It is used to calculate interest payments, determine repayment schedules, and evaluate overall investment performance.
Additionally, the principal sum usually remains constant and is gradually repaid or grows over time, depending on the terms of the loan or the performance of the investment. It is separate from any interest or income that may be earned or accrued on the principal amount.
Common Misspellings for PRINCIPAL SUM
- orincipal sum
- lrincipal sum
- -rincipal sum
- 0rincipal sum
- peincipal sum
- pdincipal sum
- pfincipal sum
- ptincipal sum
- p5incipal sum
- p4incipal sum
- pruncipal sum
- prjncipal sum
- prkncipal sum
- proncipal sum
- pr9ncipal sum
- pr8ncipal sum
- pribcipal sum
- primcipal sum
- prijcipal sum
Etymology of PRINCIPAL SUM
The word "principal" originates from the Latin word "principium", which means the beginning or starting point. It entered the English language through the Old French word "principal", referring also to the starting point or main part of something.
In the context of finance and loans, the term "principal" specifically refers to the original amount of money borrowed or invested. It is the base amount upon which interest is calculated.
The term "principal sum" combines "principal" with "sum", which comes from the Old English word "sum", meaning a quantity of something. Together, "principal sum" refers to the original amount of money in a loan or investment, without considering any interest or additional amounts.
Similar spelling words for PRINCIPAL SUM
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