What is AMORTIZATION? What does AMORTIZATION mean? AMORTIZATION meaning - AMORTIZATION pronunciation - AMORTIZATION definition - AMORTIZATION explanation - How to pronounce AMORTIZATION?
Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.
Amortization is the process of reducing, or accounting for, an amount (usually a financial debt) over a period according to a plan.
The word comes from Middle English amortisen to kill, alienate in mortmain, from Anglo-French amorteser, alteration of amortir, from Vulgar Latin admortire "to kill", from Latin ad- and mort-, "death".
Applications of amortization:
1. When used in the context of a home purchase, amortization is the process by which loan principal decreases over the life of a loan, typically an amortizing loan. As each mortgage payment is made, part of the payment is applied as interest on the loan, and the remainder of the payment is applied towards reducing the principal. An amortiza...