Amortization: meaning, definitions and examples
๐ฐ
amortization
[ หรฆmษหrtษชหzeษชสษn ]
finance term
Amortization refers to the process of gradually reducing a debt or the cost of an intangible asset through regular payments over a set period. In financial terms, this typically involves paying off a loan in scheduled installments that cover both the principal and interest. It helps businesses and consumers manage their debts effectively and allows for the smooth budgeting of future cash flows.
Synonyms
depreciation, liquidation, payoff.
Examples of usage
- The bank offers an amortization schedule for the loan.
- His mortgage has a 30-year amortization period.
- Understanding amortization is crucial for effective financial planning.
Translations
Translations of the word "amortization" in other languages:
๐ต๐น amortizaรงรฃo
๐ฎ๐ณ เคนเฅเคฐเคพเคธ
๐ฉ๐ช Amortisation
๐ฎ๐ฉ amortisasi
๐บ๐ฆ ะฐะผะพััะธะทะฐััั
๐ต๐ฑ amortyzacja
๐ฏ๐ต ๅๅด
๐ซ๐ท amortissement
๐ช๐ธ amortizaciรณn
๐น๐ท amortisman
๐ฐ๐ท ๊ฐ๊ฐ์๊ฐ
๐ธ๐ฆ ุงูุงุณุชููุงู
๐จ๐ฟ amortizace
๐ธ๐ฐ amortizรกcia
๐จ๐ณ ๆ้
๐ธ๐ฎ amortizacija
๐ฎ๐ธ afskrift
๐ฐ๐ฟ ะฐะผะพััะธะทะฐัะธั
๐ฌ๐ช แแแแ แขแแแแชแแ
๐ฆ๐ฟ amortizasiya
๐ฒ๐ฝ amortizaciรณn
Etymology
The term 'amortization' originates from the late Latin word 'ammortire,' which means 'to kill off.' This reflects the idea of gradually eliminating a debt or liability by breaking it down into smaller, manageable parts. The concept of amortization has roots in the financial practices that emerged during the medieval period, where various methods of debt management and repayments were developed. Over time, it has become a standard term in modern finance and accounting, applied to loans, mortgages, and intangible assets such as patents and copyrights. The practice of amortization allows businesses and individuals to plan their finances more effectively by spreading out the cost of an asset or liability over its useful life.
Word Frequency Rank
Ranked #11,761, this word falls into high-advanced vocabulary. It appears less frequently but is valuable for expressing precise meanings in specific contexts.
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- 11758 seizing
- 11759 chasing
- 11760 guise
- 11761 amortization
- 11762 stagnation
- 11763 willow
- 11764 obstructions
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