principal

(noun)

The money originally invested or loaned, on which basic interest and returns are calculated.

Related Terms

Examples of principal in the following topics:

  • Interest Compounded Continuously

    • The amount of interest accrued depends on the principal (amount borrowed/deposited), the interest rate (a percentage of the principal), period (amount of time between interest payments) and time elapsed.
    • In simple interest, interest is accrued on the principal alone.
    • Total amount owed/earned which includes the principal and the interest is given by $A=P+I$.
    • To calculate interest alone, simply subtract the principal from $M$.
    • Starting with a principal of $1000, interest rises exponentially.

  • Fractions Involving Radicals

    • This same principal can be applied to fractions: whatever we do to the numerator, we must also do to the denominator, and vice versa.

  • Formulas and Problem-Solving

    • Where I is interest, p is the principal amount loaned ($20,000), r is the interest rate (2%, or 0.02) per year, and T is the number of years elapsed (15 months will be 1.25 years).

  • Standard Equations of Hyperbolas

    • A conjugate axis of length 2b, corresponding to the minor axis of an ellipse, is sometimes drawn on the non-transverse principal axis; its endpoints ±b lie on the minor axis at the height of the asymptotes over/under the hyperbola's vertices.

  • Applications of Systems of Equations

    • The principal has imposed two restrictions.

  • Domains of Rational and Radical Functions

    • The principal square root function $f(x)=\sqrt x$ (usually just referred to as the "square root function") is a function that maps the set of non-negative real numbers onto itself.