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Business Definition for: installment to amortize one dollar
Dictionary of Business Terms
installment to amortize one dollar

a mathematically computed factor derived from compound interest functions that offers the level periodic payment required to retire a $1 loan within a certain time frame. The periodic installment must exceed the periodic interest rate.

See also amortize or amortization , amortization schedule
Dictionary of Real Estate Terms
installment to amortize one dollar

a mathematically computed factor derived from compound interest functions that offers the level periodic payment required to retire a $1.00 loan within a certain time frame. The periodic installment must exceed the periodic interest rate.

Examples:

  • $.2638 is required to amortize $1.00 at 10% interest, with 5 yearly payments.
  • $.1627 is required to amortize $1.00 at 10% interest with 10 yearly payments.
  • $.1175 is required to amortize $1.00 at 10% interest, with 20 yearly payments.

See also amortization schedule , amortization
Related Terms:
amortize or amortization

  1. reduction of a debt by periodic charges to assets or liabilities, such as payments on mortgages.
  2. in accounting statements, the systematic write-off of costs incurred to acquire an intangible asset, such as patents, copyrights, goodwill, organization, and expenses.

amortization schedule

table that shows the periodic payment, interest and principal requirements, and unpaid loan balance for each period of the life of a loan.

amortization schedule

table that shows the periodic payment, interest and principal requirements, and unpaid loan balance for each period of the life of a loan.

amortization

gradual reduction of an amount over time. Examples are amortized expenses on limited life intangible assets and deferred charges. Assets with limited life have to be written down over the period benefitted. The amortization entry is to debit amortization expense and credit the intangible asset. However, unlimited life intangibles are subject to an annual impairment test.

Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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