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Principal Definition

What is Principal?

Principal in bonds is their par value. It is the initial investment paid for a security or bond, and it does not include any interest derived from such investments. In contracts, a principal can refer to an agent who is acting on behalf of another person or entity. It can also refer to anyone who has signed a contract and therefore have duties, rights, and obligations derived from the contract or agreement.

Additional Resources

CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or are looking for a career change, the CFI website has a multitude of free resources to help you jumpstart your Career in Finance. If you seek to improve your technical skills check out some of our most popular courses. Below are some additional resources for you to further explore:

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  • Finance Terms


The Financial Modeling Certification