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Glossary

Terms6 shown

BondA debt instrument issued by a government or company, under which investors lend funds and receive interest and repayment of principal at maturity in accordance with the agreed terms.
Interest RatesThe interest rate is the ratio of interest to principal and may indicate the cost of borrowing or the return on lending funds and investments.
Maturity dateThe date on which the issuer returns the principal in accordance with the terms of the bond.
Simple interestSimple interest is calculated only on the initial principal; previously accrued interest is not included in the basis for subsequent interest calculations.
Compound interestCompound interest is a method of calculation in which previously earned interest is added to the principal, allowing that interest to continue earning interest in subsequent interest-calculation periods.
PrincipalPrincipal is the initial amount borrowed, lent, or invested, and serves as the basis for calculating interest.

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Definition

Principal

Principal is the initial amount borrowed, lent, or invested, and serves as the basis for calculating interest.

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