Amortization

Amortization is the process of gradually paying off debt through regular payments over time, where each payment covers both interest and principal. It is commonly applied to loans such as mortgages and business debt. The amortization process ensures that borrowers reduce their debt while managing cash flow, which is critical for financial planning in businesses and real estate investments.

• Gradual debt repayment over time.
• Commonly applied to loans like mortgages and business debt.
• Helps borrowers manage cash flow and reduce debt.
• Crucial for long-term financial planning.