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c.1300, "main, principal, chief, dominant, most important;" also "great, large," from Old French principal "main, most important," of persons, "princely, high-ranking" (11c.), from Latin principalis "first in importance; original, primitive," from princeps (see prince).
c.1300, "ruler, governor;" also "main part;" from principal (adj.) or from or influenced by noun uses in Old French and Latin. From mid-14c. in the sense of "money on which interest is paid;" 1827 as "person in charge of a public school," though meaning "head of a college or hall" was in English from mid-15c.
The original amount of money lent, not including profits and interest.