loans
amortization
The process of spreading out a loan into a series of fixed payments over time, where each payment covers both interest and a portion of the principal.
Example
"The amortization schedule showed that after 5 years, she had paid off $12,000 of the principal."
💡 Memory Tip
Think 'a-mort' — mort means death in French. You're slowly putting the debt to death.
Etymology
From Latin 'admortire' meaning 'to kill off' — you're slowly killing off the debt.
Common Misspellings
amortisationamortizatonamortizaitonamortiztion
Related Terms
See Also
interest