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

It also backed its guidance for adjusted earnings before interest, taxes, depreciation, and amortization of $400 million to $420 million.

From The Wall Street Journal • May 13, 2026

However, that guidance excludes about $1.02 a share for stock-based compensation, net tangible amortization, and acquisition related costs.

From Barron's • May 13, 2026

The company’s adjusted earnings before interest, taxes, depreciation and amortization, and adjusted earnings per share both rose 25%.

From The Wall Street Journal • May 13, 2026

Adjusted earnings before interest, taxes, depreciation and amortization after leases increased to 11.52 billion euros from 11.30 billion euros, while the corresponding margin was 38.6%, up from 38%.

From The Wall Street Journal • May 13, 2026

The bank is also called upon to determine appropriate rates of depreciation for fixed assets and to ensure that the required amortization payments to the budget are made on time.

From Area Handbook for Romania by Bernier, Donald W.

Related Words

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