Amortization
The process of gradually writing off the initial cost of an asset over a period.
Amortization refers to the gradual reduction of debt through regular payments, impacting financial planning and budgeting. It is crucial for managing cash flow, optimizing financial performance, and supporting investment strategies. By providing a structured repayment plan, amortization supports efficient financial management, reduces risks, and contributes to successful project delivery by ensuring that financial obligations are met, aligned with project schedules, and capable of supporting long-term financial stability and growth.
Used in a sentence
The mortgage was set up with a 30-year amortization schedule.
Synonyms/variation
Depreciation
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