amortization

Vocabulary Word

Definition

'Amortization' means gradually reducing a debt by consistently making small payments over a period of time. It's like completing a months-long puzzle by adding a piece every day.

Examples in Different Contexts

In film production, 'amortization' might concern spreading the cost of producing a movie over its expected revenue years. A producer might say, 'The amortization of this film's budget will rely heavily on box office and streaming revenues.'

Practice Scenarios

Tech

Scenario:

Our app should always show users how much they'll have to pay every month for their loan.

Response:

That's a good point. Let's design an amortization schedule to help users understand their monthly payments.

Business

Scenario:

We need to update our financial accounting to reflect the cost of software development for the next five years.

Response:

You're right. We should adopt an amortization strategy to spread the cost evenly over the next five years.