How does a PPN guarantee my principal?

Using the example of a $100 investment, the majority of your money, say $70, is used by the PPN manager to buy an investment that is guaranteed to be repaid, with interest after a period of time (for example 10 years). A bank or insurance company will often provide the guarantee on the investment. By the end of the guarantee period, the $70 will have grown to $100 because of interest earned on it. This is how the PPN managers guarantee that they will repay you at least as much money as you originally invested.

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