Principal and Principle are two examples of English words with the same sound, but they differ in terms of spelling and meaning. Most times, people find it difficult to clearly differentiate the two words due to the fact that both words are pronounced in the same way.
However, aside from the fact that they are not totally the same in terms of spelling, their differences can also be noticed when you check their meanings. Although both words have the same root word, which means primary or basic, however, the principal is used mostly to refer to anything that is physical, while the principle is used mainly for abstract things.
The principal is mostly used to refer to the head of a certain thing. For instance, the word can be used to refer to the chief academic officer of a college. The principal also means an amount of money loaned or invested. The principle, on the other hand, means a primary, fundamental assumption or guiding belief. It also means a rule or law of nature.