SEARCH THE BUSINESS GLOSSARY
- face amount of a financial instrument on which interest accrues. For example, a $25,000, 8%, one-year note has a principal portion of $25,000 and an interest portion of $2000.
- carrying value of an obligation (i.e., bonds payable).
- amount invested, excluding return on investment.
- high-level individual (i.e., partner) in a CPA firm having major authority and responsibilities.
- owner, especially one with executive authority, of a business firm.
- major party to a transaction, acting as either a buyer or a seller. A principal buys and sells for his or her own account and risk.
- owner of a privately held business.
Banking and Finance:
- face amount of a debt instrument or deposit on which interest is either owed or earned.
- balance of a debt, separate from interest. See also principal amount .
Investments: basic amount invested, exclusive of earnings.
- face amount of a loan evidencing the amount repayable, exclusive of interest, according to the terms of the note securing the obligation. See also holder in due course .
- original amount of a time deposit or savings account on which interest is paid daily, monthly, or at other intervals. See also compound interest .
- primary borrower in a loan, as distinguished from the guarantor or co-maker. If the borrower defaults, the guarantor is secondarily liable.
- person who has controlling interest in a joint venture, corporation, or partnership.
- person who appoints another to act on his behalf as agent or attorney in fact .
- property of an estate or investment trust, exclusive of income.
insurance company that employs or contracts with an insurance agent to represent it.See also surety bond
- one who owns or will use property. For example, the principals to the lease are the landlord and the tenant; principals to a sale are the buyer and the seller.
- one who contracts for the services of an agent or broker; the broker's or agent's client.
- amount of money raised by a mortgage or other loan, as distinct from the interest paid on it. See also principal amount .
one who contracts for the services of an agent or broker , the broker's or agent's client .
Example: Grey wishes to purchase a shopping center. Grey engages Jamison, a mortgage broker, to arrange financing . Jamison arranges a loan in the name of the principal, Grey. The loan is payable as interest only for 5 years, with the principal payable as a balloon payment at the end of year 5.
the amount of money raised by a mortgage or other loan, as distinct from the interest paid on it.
Example: Abel arranged a loan at 6% interest with $100,000 principal on his home. The first monthly payment is $1,200 including $500 interest and $700 that amortized the principal.
Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2000, 1995, 1991, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.