Principal: Beyond the Basics

The word 'principal' has multiple meanings. In finance, it refers to original sum of money lent or invested, excluding any interest or profits.

In education, a principal is the head of a school. Interestingly, the term reflects their 'principal' role in ensuring educational quality and managing school affairs.

In business, 'principal' can denote a company owner or main party to a transaction. It distinguishes from an agent, who represents others in deals.

Legally, a 'principal' can be an entity that authorizes another (the agent) to act on its behalf. This is instrumental in contract law and agency law.

In performing arts, 'principal' refers to a leading performer, such as the main ballerina or actor. Their roles are central to the performance's success.

With compound interest, the principal grows over time. Albert Einstein allegedly called compound interest the 'eighth wonder of the world' due to its powerful effect on capital.

Don't confuse 'principal' with 'principle,' meaning a fundamental truth or proposition. Remember, the school 'principal' is your 'pal,' a mnemonic to differentiate the two.