Definition

Noun: - The original amount of money invested, borrowed, or loaned, before any interest, earnings, or other additions are calculated. This is the core capital sum, distinct from the income or interest it generates.

Usage

The term "principal sum" is used primarily in financial, legal, and accounting contexts to refer to the base monetary amount in transactions involving debt or investment. It is the figure upon which calculations for interest or returns are based. - The loan agreement specifies a principal sum of $10,000, with an annual interest rate of 5%. - Upon maturity, the bond will repay the principal sum in full.

Advanced Usage

• In legal contexts, such as wills or insurance policies, "principal sum" can refer to a specified core amount of money to be paid, separate from any additional benefits or interest.
  • The life insurance policy pays a principal sum to the beneficiary upon the policyholder's death.

Variants and Related Words

• Principal (n): A common, shortened form of "principal sum" in many financial contexts.
  • You will be charged interest on the remaining principal.
• Corpus (n): In trust law, the principal or capital of a trust, as opposed to the income it produces.
• Capital (n): Wealth in the form of money or assets, often used more broadly than "principal sum."

Synonyms

• Capital sum
• Principal
• Face value (for bonds and securities)
• Loan principal
• Investment principal

Related Phrases

• Return of principal: The repayment of the original sum invested or loaned.
  • The investment guarantees the return of principal after five years.
• Principal amount: Another common phrase with identical meaning to "principal sum."
  • The principal amount is protected under the terms of the deposit.

Noun

1. capital as contrasted with the income derived from it