amortize

am·or·tize   (ām'ər-tīz', ə-môr'-)    tr.v.   am·or·tized, am·or·tiz·ing, am·or·tiz·es To liquidate (a debt, such as a mortgage) by installment payments or payment into a sinking fund. To write off an expenditure for (office equipment, for example) by prorating over a certain period. [Middle English amortisen, to alienate in mortmain, from Old French amortir, amortiss-, from Vulgar Latin *admortīre, to deaden : Latin ad-, ad- + Latin mors, mort-, death; see mer- in Indo-European roots.] am'or·tiz'a·ble adj.

amortize 

amortize

To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. Likewise, an investor will usually amortize the premium each year on a bond purchased at a price above its principal.

Main Entry: amor·tize
Pronunciation: 'a-m&r-"tIz, &-'mor-
Function: transitive verb
Inflected Forms: -tized; -tiz·ing
: to reduce (an amount) gradually: as a : to pay off (as a loan) gradually usually by periodic payments of principal and interest or payments to a sinking fund b : to gradually reduce the cost of (as an asset) esp. for tax purposes by making periodic charges to income over a time span <amortize the machinery over five years> —see also DEPRECIATION —compare CAPITALIZE, DEDUCT —amor·ti·za·ble adjective —amor·ti·za·tion /"a-m&r-t&-'zA-sh&n, &-"mor-/ noun