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principal definition - finance
  1. The amount of money that is borrowed, excluding the interest charge, that remains unpaid. Principal also may be part of a monthly payment that reduces the outstanding balance of a loan. For instance, mortgage payments consist of principal and interest payments.
  2. The person or company who is the main party to a transaction.
  3. The role that a broker or dealer plays when selling or buying securities for his or her own account.
  4. A company executive, typically one with an ownership interest in the company.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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