What is principal as used in financial mathematics?

In financial mathematics, the principal refers to the initial amount of money that is invested, borrowed, or saved. It is the original sum of money that is either invested or borrowed, on which interest is calculated. The principal amount is the basis for calculating interest and determining the final amount of money that will be earned or owed.

Principal is the initial amount invested or loaned. It is the starting point for calculating interest and other financial measures.