noun the action or process of gradually reducing or writing off a debt, such as a loan or mortgage, by making periodic payments
In real estate, amortization is commonly used to refer to the gradual reduction of a mortgage loan through regular payments of both principal and interest.
In finance, amortization refers to the process of spreading out the cost of an intangible asset over its useful life, typically through periodic payments.
In business, amortization can also be applied to the depreciation of certain assets over time to reflect their decreasing value.
In economics, amortization can be used to describe the process of paying off a loan or debt through scheduled payments.
In accounting, amortization is the gradual recognition of an intangible asset's cost as an expense on the income statement.
In the financial services industry, a writer may discuss the concept of amortization in articles or reports related to loans, mortgages, or investments.
A psychologist may use the concept of amortization when advising clients on budgeting or financial planning to help them understand the gradual repayment of debts over time.
Accountants often deal with amortization when preparing financial statements or tax returns for businesses that have acquired assets and need to account for their gradual depreciation over time.
Real estate agents may explain the concept of amortization to clients who are considering taking out a mortgage to purchase a property, helping them understand how the loan will be gradually paid off over a set period.
Financial analysts use amortization when evaluating the financial performance of companies, especially those with significant intangible assets that need to be amortized over time to reflect their diminishing value.