What term describes the amount of money you invest or the amount owed on a debt, excluding interest?

The term that describes the amount of money you invest or the amount owed on a debt, excluding interest, is the principal. In the context of investing, the principal is the initial sum of money placed into an investment or the original amount borrowed in the case of a loan. It serves as the foundation from which interest is calculated, but interest itself is not included in this definition. This is crucial because understanding principal helps investors gauge how much they have at stake before returns or debts are factored in.

Investment, while related, refers more broadly to the act of allocating resources, such as capital, with the expectation of generating an income or profit. Return typically relates to the earnings generated from an investment, highlighting the gains made over the principal. Value can refer to the overall worth of an asset or investment but does not specifically denote the initial amount invested or owed. Hence, principal is the most accurate term for the amount of money that is purely the invested capital or the face value of a debt.