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- Dictionaryamortize/əˈmɔːtʌɪz/
verb
- 1. gradually write off the initial cost of (an asset) over a period: "the vessel's owners could not amortize her high capital costs"
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Amortize means to reduce a debt or cost by paying small regular amounts, or to take a cost away from the amount of tax that is paid. Learn more about the meaning, usage and pronunciation of amortize with examples from the Cambridge Dictionary.
- English (US)
AMORTIZE meaning: 1. to reduce a debt or cost by paying...
- Amorphous
AMORPHOUS definition: 1. (of a physical thing) having no...
- Znaczenie Amortize, Definicja W Cambridge English Dictionary
AMORTIZE definicja: 1. to reduce a debt or cost by paying...
- Translate to Traditional Chinese
AMORTIZE translate: 分期償還（債務）. Learn more in the Cambridge...
- Simplified
AMORTIZE translate: 分期偿还（债务）. Learn more in the Cambridge...
- Amortize: Portuguese Translation
amortize - definition, audio pronunciation and more for...
- Astronomical
ASTRONOMICAL definition: 1. connected with astronomy: 2. An...
- English (US)
Amortize means to pay off a loan gradually or to reduce the cost or value of something over time. Learn the etymology, examples, and legal usage of this verb from the Merriam-Webster dictionary.
Amortize definition: to liquidate or extinguish (a mortgage, debt, or other obligation), especially by periodic payments to the creditor or to a sinking fund.. See examples of AMORTIZE used in a sentence.
- What Is Amortization?
- Understanding Amortization
- Amortization of Loans
- How to Calculate Loan Amortization
- Pros and Cons of Loan Amortization
- Amortization of Intangible Assets
- Why Is Amortization Important?
- Amortization vs. Depreciation
- Example of Amortization
- The Bottom Line
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Amortization is an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time. Concerning a loan, amortization focuses on spreading out loan payments over time. When applied to an asset, amortization is similar to depreciation.
The term “amortization” refers to two situations. First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loan—for example, a mortgage or a car loan—through installmentpayments. Second, amortization can also refer to ...
Amortization can refer to the process of paying off debt over time in regular installments of interest and principal sufficient to repay the loan in full by its maturity date. A loan amortization schedule represents the complete table of periodic loan payments, showing the amount of principal and interest that comprise each level payment until the ...
The formula to calculate the monthly principal due on an amortized loan is as follows: Principal Payment=TMP−(OLB×Interest Rate12 Months)where:TMP=Total monthly paymentOLB=Outstanding loan balance\begin{aligned}&\text{Principal Payment} = \text{TMP} - \Big ( \text{OLB} \times \frac { \text{Interest Rate} }{ \text{12 Months} } \Big ) \\&\textbf{wher...
Amortized loans feature a level payment over their lives, which helps individuals budget their cash flows over the long term. Amortized loans are also beneficial in that there is always a principal component in each payment, so that the outstanding balance of the loan is reduced incrementally over time. The main drawback of amortized loans is that ...
Amortization can also refer to the amortization of intangibles. In this case, amortization is the process of expensing the cost of an intangible asset over the projected life of the asset. It measures the consumption of the value of an intangible asset, such as goodwill, a patent, a trademark, or copyright. Amortization is calculated in a similar m...
Amortization is important because it helps businesses and investors understand and forecast their costs over time. In the context of loan repayment, amortization schedules provide clarity concerning the portion of a loan payment that consists of interest versus the portion that is principal. This can be useful for purposes such as deducting interes...
Amortization and depreciation are similar concepts, in that both attempt to capture the cost of holding an asset over time. The main difference between them, however, is that amortization refers to intangible assets, whereas depreciation refers to tangible assets. Examples of intangible assets include trademarks and patents; tangible assets include...
Let’s look at a four-year, $30,000 auto loan at 3% interest. The monthly payment is going to be $664.03. That is arrived at as follows: $30,000×0.0025×1.002548(1.0025×1.002548)−1\begin{aligned}&\$30,000 \times \frac{0.0025\times1.0025^{48}}{(1.0025 \times1.0025^{48}) - 1}\end{aligned}$30,000×(1.0025×1.002548)−10.0025×1.002548 In the first month,...
Amortization is a technique of gradually reducing an account balance over time. When amortizing loans, a gradually escalating portion of the monthly debt payment is applied to the principal. When amortizing intangible assets, amortization is similar to depreciation, where a fixed percentage of an asset's book value is reduced each month. This techn...
Amortization is an accounting technique to lower the value of a loan or an intangible asset over time. Learn how to calculate amortization with formulas, schedules, and examples for loans and intangibles.
Definition of amortize verb in Oxford Advanced Learner's Dictionary. Meaning, pronunciation, picture, example sentences, grammar, usage notes, synonyms and more.
Amortize means to reduce a debt or cost by paying small regular amounts, or to take a cost away from the amount of tax that is paid. Learn how to use this term in accounting, tax and business contexts, and see translations in different languages.
Amortize means to liquidate a debt or to write off an asset over time. Learn the origin, usage and synonyms of this word from various sources, such as American Heritage, Collins and Random House dictionaries.
