Asked by: Veneranda Usuellibusiness and finance interest rates
What is an amortized payment?
Last Updated: 19th January, 2020
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Thereof, what does amortized payment mean?
Amortization is the process of spreading out a loan into a series of fixed payments over time. You'll be paying off the loan's interest and principal in different amounts each month, although your total payment remains equal each period. The interest costs (what your lender gets paid for the loan).
One may also ask, what does Reamortize mean? Reamortizing your loan means that you can adjust the terms of your loan to change the loan payment amount or to shorten or lengthen the loan term. You may do so as long as you do not exceed the maximum term limit for your particular type of loan. You cannot change the interest rate you pay on your loan.
Besides, what is an example of amortization?
Amortization is the process of incrementally charging the cost of an asset to expense over its expected period of use, which shifts the asset from the balance sheet to the income statement. Examples of intangible assets are patents, copyrights, taxi licenses, and trademarks.
Why do we amortize?
Amortization is a simple way to evenly spread out costs over a period of time. Typically, we amortize items such as loans, rent/mortgages, annual subscriptions and intangible assets. In order to spread the total cost according to the agreement evenly over the life of the terms, we amortize.