amortization

American  

[am-er-tuh-zey-shuhn, uh-mawr-] / ˌæm ər təˈzeɪ ʃən, əˌmɔr- /

noun

1. an act or instance of amortizing a debt or other obligation.

2. the sums devoted to this purpose.

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amortization British  

/ əˈmɔːtɪzmənt, əˌmɔːtaɪˈzeɪʃən /

noun

1. 1. the process of amortizing a debt

   2. the money devoted to amortizing a debt

2. (in computing the redemption yield on a bond purchased at a premium) the amount that is subtracted from the annual yield Compare accumulation

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amortization Cultural  

1. A term that refers either to the gradual paying off of a debt in regular installments over a period of time or to the depreciation of the “book value” (that is, the standard assessed value) of an asset over a period of time.

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Other Word Forms

• amortizement
  noun

Etymology

Origin of amortization

First recorded in 1665–75, amortization is from the Medieval Latin word a(d)mortizātiōn- (stem of admortizātiō ). See amortize, -ation

Explanation

Amortization means a debt is being paid off by a series of payments. An amortization schedule for your car loan will show exactly how much you owe and how long it’ll take to pay it. Amortization is fancy way to describe a payment plan: you gradually pay off a specific amount by making small payments according to a set schedule. Amortization takes place over a specific period of time. The root of amortization can be traced to the Middle English word amortisen, meaning “to kill.” In this case, it’s a debt that’s being killed off — slowly, over time. The word is often applied to car or home loans.

Example Sentences

Amortization in his case violates Mr. Mbogo’s property rights, and its retroactivity strips him of due process.

From The Wall Street Journal • Apr. 12, 2016

When the Company last provided its outlook on November 5, 2008, it expected 2008 Adjusted Operating Income before Depreciation and Amortization to grow around 5%, off a 2007 base of $12.9 billion.

From Time Magazine Archive

Taking into account these items and operating trends, Time Warner now anticipates that growth in 2008 Adjusted Operating Income before Depreciation and Amortization will be around 1%, off a 2007 base of $12.9 billion.

From Time Magazine Archive

"Amortization of patents" was $183,028 in 1923 and $185,138 last year.

From Time Magazine Archive

One phase of redemption will be further discussed under "Amortization of Capital" and "Ratio of Output to the Mine."

From Principles of Mining Valuation, Organization and Administration by Hoover, Herbert

Related Words

• amount
• award
• cash
• deposit
• disbursement
• fee
• outlay
• pension
• premium
• refund
• reimbursement
• remittance
• reparation
• repayment
• restitution
• return
• reward
• royalty
• salary
• settlement