Amortize GRE Vocabulary Flashcard
/əˈmɔː.taɪz/ (verb)
Definition
to reduce a debt by installments or paying small amounts of money regularly, pay off with regular payments, diminish by installment payments, redeem in small amounts and gradually, repay, remunerate, pay off, pay back
Example
An amortizing loan is a type of debt that requires regular monthly payments. Each month, a portion of the payment goes toward the loan’s principal and part of it goes toward interest.
Also known as an installment loan, fully amortized loans have equal monthly payments. Partially amortized loans also have payment installments, but either at the beginning or at the end of the loan, a balloon payment is made.
Over time, the balance of an amortized loan decreases. A borrower can monitor the progress of paying off his or her loan’s balance by using an amortization schedule.
An amortization schedule is also a helpful visual representation that depicts exactly how much of each month’s payment goes toward interest and how much is applied to principal reduction.
Source: https://www.bankrate.com/
Parts of speech
Noun: amortization
Adjective: amortizable
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