Tuesday, 12 June 2012

Principle and Principal

Principle
The word principle means a standard, a law or a rule. This means you can have:

Eg. - the principles of economics, which are the laws that govern economic theory

Principal
n legal and financial English, however, principal is often a noun (from principal person).
In the law of agency, the principal is the one on whose behalf the agent acts:  

She attended the meeting as the agent of a principal who wished to remain anonymous. 


  In banking the principal (sum) is money invested or borrowed on which interest is paid:  

The borrower was only able to make the minimum payment, which covered the interest but did not reduce the principal.

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