Examples:

• According to the Peter Principle, a worker will rise to his or her level of incompetence.

• Ms. Benson said that boredom was her principal reason for retiring.
• "Last summer, Edward DeMarco, Fannie Mae and Freddie Mac's regulator, scuppered the White House's plan to write down principal for half a million homeowners who'd fallen behind on payments, listing among his reasons that it would encourage others to stop paying. It was an argument of principle over principal: DeMarco's own analysis showed that the White House plan could save $3.6 billion."
  (Tad Friend, "Home Economics." The New Yorker, February 4., 2013)

Usage Notes:

• "principal, principle There is nothing that we can tell you about this spelling problem that innumerable handbooks (we have more than forty in our collection) and dictionaries from grammar-school level on up have not. But read it one more time: only principal is an adjective. Principal is also a noun, signifying either a person or money. Principle is only a noun, usually designating a law or rule. A quick check of any reputable dictionary will guide you in doubtful cases.
  
  "Ah, but even if you know the difference, it is still easy to goof by writing 'the basic principal' or 'their principle occupation.' These errors seem to be the ones that are most common. And bear in mind that if you have a word processor, it will not help you here.

  I am even more nervous about some words I should have mastered in grade school. I know when to use . . . 'principle,' not 'principal,' but I always pause just an instant to make sure. -- And More by Andy Rooney, 1982

  Perhaps we should imitate Andy Rooney's pause. It could be the pause that refreshes the memory."
  (Merriam-Webster's Dictionary of English Usage, 1994)

• "Two of the most commonly confused words in the English language are principal and principle.
  
  "One thing to remember is that principle is always a noun, never an adjective. It means 'a standard of conduct,' 'an essential element,' or 'a general truth.'
  
  "Principal is an adjective meaning 'first in authority or importance.' When used as a noun, as in principals of a play, principal of a school, or the principal of a loan, it is the shortened form of a phrase ('principal players,' principal teacher,' and 'principal sum').
  
  "A reader once suggested to us a way that everyone can keep this pair straight: if you can substitute 'main' (which contains an 'a'), use principal (which also contains an 'a'). If you can substitute 'rule' (which ends in 'le'), use principle (which also ends in 'le')."
  (William and Mary Morris, Harper Dictionary of Contemporary Usage. Harper & Row, 1975)

Practice: