Amortization

Definition:

Paying off debt with installments, where the installments can be either a series of equal payments or, more commonly, a calculated schedule of payments that includes accumulation of interest. This calculation process is also often used to determine usage and depreciation on assets.

Examples:

Mortgage lenders who set up their clients with amortization of payments are now losing money as the homeowners default on their loans.

Takeovers may be more on the rise now that goodwill amortization has been done away with and smaller companies are required to pay for their large purchases up front.