Amortises definitions
| Word backwards | sesitroma |
|---|---|
| Part of speech | The word "amortises" is a verb. |
| Syllabic division | a-mor-tis-es |
| Plural | The plural of "amortises" is amortises. |
| Total letters | 9 |
| Vogais (4) | a,o,i,e |
| Consonants (4) | m,r,t,s |
Amortization is a financial term that refers to the process of spreading out a loan or financial obligation over a series of fixed payments. This allows the borrower to repay the loan gradually over time, rather than having to make one large payment all at once. Amortization is commonly used for long-term loans, such as mortgages, car loans, or business loans.
One of the key benefits of amortization is that it helps borrowers budget and plan for their loan payments. By breaking down the total amount owed into smaller, more manageable payments, borrowers can better understand how much they need to pay each month and budget accordingly. This can help prevent financial strain and ensure that payments are made on time.
The amortization process
When a loan is amortized, each payment made by the borrower consists of both principal and interest. In the early stages of the loan, a larger portion of each payment goes towards paying off the interest, with a smaller amount going towards the principal. Over time, the balance shifts, and more of each payment goes towards paying off the principal.
Benefits of amortization
Amortization can help borrowers build equity in an asset, such as a home or car, over time. As payments are made, the borrower's equity in the asset increases, while the amount owed decreases. This can be especially beneficial for homeowners, as it allows them to build wealth in the form of home equity.
Types of amortization
There are several different types of amortization schedules, including straight-line amortization, declining balance amortization, and fixed installment amortization. Each type has its own advantages and disadvantages, depending on the borrower's financial situation and needs.
In conclusion, amortization is a valuable financial tool that allows borrowers to repay loans over time through a series of fixed payments. By spreading out the total amount owed, borrowers can budget and plan for their payments more effectively, ultimately helping them achieve their financial goals.
Amortises Examples
- The company amortises the cost of the new equipment over a five-year period.
- As per the agreement, the loan will be amortised through monthly payments.
- The value of the intangible asset will be amortised over its useful life.
- The accountant will amortise the prepaid expenses over the appropriate period.
- The software company chooses to amortise its development costs over three years.
- The mortgage lender offers a variety of options to amortise the loan.
- The company decided to amortise the goodwill arising from the acquisition.
- The car loan allows borrowers to amortise the principal amount over a specific term.
- The importer will amortise the cost of customs duties across multiple shipments.
- The insurance company must amortise the deferred policy acquisition costs over time.