One problem with these words is that many students are taught that saying "the principal is my pal" will help them to remember the difference between the -pal word and the -ple word. While it is true that principal is used as a noun to mean "the chief person," the mnemonic (memory device) completely ignores one principal use of principal, which is as an adjective, meaning "main," "chief," "most important." Indeed, of these two words, only principal can function as an adjective.
– Principal is an adjective meaning "most important" or "main" OR a noun designating "the main or chief one." Thus, the principal sum of money on which one draws interest is the principal, and the principal person in a school is the principal.
– Principle can never be an adjective, and that is where most people err. It is a noun only. referring to a fundamental law or concept or to a code of conduct, often used in the plural, as in "moral principles." Once we grasp this principle, we are less likely to confuse these words.
In fact, the words have absolutely no meanings in common. While principal refers to "chief" or "main" (or to the chief or main person or thing), principle never does. While principle refers to a fundamental law or code of conduct, principal never does.