principal

Vocabulary Word

Definition

A 'principal' can be a person who leads a group, like a principal of a school, or it can denote the main or primary element among others. It's like calling someone the 'chief' or saying something is 'prime' or 'key'.

Examples in Different Contexts

In microfinance, the 'principal' amount loaned to individuals or small businesses is often modest but impactful. A microfinance officer might say, 'Providing small principal loans can empower entrepreneurs in underserved communities to build businesses and improve local economies.'

Practice Scenarios

Finance

Scenario:

This loan offer seems quite attractive. Before committing, we need to understand the interest charging mechanism thoroughly.

Response:

True, we need to assess how interest will be charged on the principal amount before finalizing the loan.

Tech

Scenario:

Our IT system's structure is complex, with various people needing different levels of access. It's crucial to allocate permissions correctly.

Response:

We must decide the access rights for each principal carefully, considering both their role and the system security.