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FINANCIAL BASICS: PRINCIPAL, PAR OR FACE VALUE

Principal, par or face value is the amount borrowers (issuers) are actually borrowing and what they must pay back, excluding the interest payments. It is the amount that the borrower must repay to the lender or bond holder at the end of the loan or bond's term, which is called the maturity date. While principal refers to loans, par and face value refer to bonds.



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