The difference between Interest and Principal

When used as nouns, interest means the price paid for obtaining, or price received for providing, money or goods in a credit transaction, calculated as a fraction of the amount or value of what was borrowed, whereas principal means the money originally invested or loaned, on which basis interest and returns are calculated.

Interest is also verb with the meaning: to engage the attention of.

Principal is also adjective with the meaning: primary.

check bellow for the other definitions of Interest and Principal

  1. Interest as a noun (uncountable, finance):

    The price paid for obtaining, or price received for providing, money or goods in a credit transaction, calculated as a fraction of the amount or value of what was borrowed.

    Examples:

    "Our bank offers borrowers an annual interest of 5%."

  2. Interest as a noun (uncountable):

    A great attention and concern from someone or something; intellectual curiosity.

    Examples:

    "He has a lot of interest in vintage cars."

  3. Interest as a noun (uncountable):

    Attention that is given to or received from someone or something.

  4. Interest as a noun (countable):

    An involvement, claim, right, share, stake in or link with a financial, business, or other undertaking or endeavor.

    Examples:

    "When scientists and doctors write articles and when politicians run for office, they are required in many countries to declare any existing [[conflict of interest conflicts of interest]]."

    "I have business interests in South Africa."

  5. Interest as a noun (countable):

    Something or someone one is interested in.

    Examples:

    "Lexicography is one of my interests."

    "Victorian furniture is an interest of mine."

    "The main character's romantic interest will be played by a non-professional actor."

  6. Interest as a noun (obsolete, rare):

    Injury, or compensation for injury; damages.

  7. Interest as a noun (usually plural):

    The persons interested in any particular business or measure, taken collectively.

    Examples:

    "the iron interest;  the cotton interest'"

  1. Interest as a verb:

    To engage the attention of; to awaken interest in; to excite emotion or passion in, in behalf of a person or thing.

    Examples:

    "It might interest you to learn that others have already tried that approach."

    "Action films don't really interest me."

  2. Interest as a verb (obsolete, often, _, impersonal):

    To be concerned with or engaged in; to affect; to concern; to excite.

  3. Interest as a verb (obsolete):

    To cause or permit to share.

  1. Principal as an adjective:

    Primary; most important.

    Examples:

    "Smith is the principal architect of this design."

    "The principal cause of the failure was poor planning."

  2. Principal as an adjective (obsolete, Latinism):

    Of or relating to a prince; princely.

    Examples:

    "rfquotek Edmund Spenser"

  1. Principal as a noun (finance, uncountable):

    The money originally invested or loaned, on which basis interest and returns are calculated.

    Examples:

    "A portion of your mortgage payment goes to reduce the principal, and the rest covers interest."

  2. Principal as a noun (North America, Australia, New Zealand):

    The chief administrator of a school.

  3. Principal as a noun (UK, Canada):

    The chief executive and chief academic officer of a university or college.

  4. Principal as a noun (legal):

    A legal person that authorizes another (the agent) to act on one′s behalf; or on whose behalf an agent or gestor in a negotiorum gestio acts.

    Examples:

    "When an attorney represents a client, the client is the principal who permits the attorney, the client′s agent, to act on the client′s behalf."

    "My principal sells metal shims."

  5. Principal as a noun (legal):

    The primary participant in a crime.

  6. Principal as a noun (North America):

    A partner or owner of a business.

  7. Principal as a noun (music):

    A diapason, a type of organ stop on a pipe organ.

  8. Principal as a noun (architecture, engineering):

    The construction that gives shape and strength to a roof, generally a truss of timber or iron; or, loosely, the most important member of a piece of framing.

  9. Principal as a noun:

    The first two long feathers of a hawk's wing.

    Examples:

    "rfquotek Spenser"

    "rfquotek J. H. Walsh"

  10. Principal as a noun:

    One of the turrets or pinnacles of waxwork and tapers with which the posts and centre of a funeral hearse were formerly crowned.

    Examples:

    "rfquotek Oxf. Gloss."

  11. Principal as a noun (obsolete):

    An essential point or rule; a principle.

  12. Principal as a noun:

    A dancer at the highest rank within a professional dance company, particularly a ballet company.

  13. Principal as a noun (computing):

    A security principal.

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