Amortize for Dummies
verb
pronunciation: 'æmər,taɪzWhat does Amortize really mean?
Hey there, let me tell you about the word "amortize." It might sound a bit complicated, but don't you worry, I'll break it down for you in the simplest way possible!
So, imagine you want to buy a really cool toy that costs a lot of money. Unfortunately, you don't have all the money to buy it upfront, but you really want to have it. That's where "amortize" comes in.
To amortize something means to slowly pay off a debt or a big expense over a specific period of time. It's like breaking down the cost of that toy into smaller, more manageable parts. Instead of paying for it all at once, you can make smaller payments over several months or years until the debt is completely paid off.
You can think of it as if you're taking a really long road trip, and instead of driving for a super long time without stopping, you take breaks along the way to rest, eat, and enjoy the journey. Similarly, by amortizing a debt, you're taking small breaks from your regular income to pay off the expense bit by bit.
Now, "amortize" can also have another meaning, especially when we talk about things like loans or mortgages. In this case, it refers to the process of dividing the total amount of money borrowed into equal payments, including both the principal amount (the original amount you borrowed) and the interest (the extra money you pay for borrowing that money).
To make it easier to understand, think of it like baking a cake. You have all the different ingredients, like eggs, flour, sugar, and butter. When you blend them together and put the cake in the oven, it takes time for it to rise and cook all the way through. Amortizing a loan is a bit like baking that cake, with each payment period being a step in the process. You gradually pay off both the money you borrowed and the interest, just like the cake gradually cooks and rises.
So, in a nutshell, "amortize" means to spread out the cost of something over time by making regular payments, or it can refer to dividing a loan or debt into equal payments that include both the borrowed amount and the interest. It's all about making things more manageable, just like taking breaks on a long road trip or baking a delicious cake.
Hope that helps, and if you have any more questions, feel free to ask!
So, imagine you want to buy a really cool toy that costs a lot of money. Unfortunately, you don't have all the money to buy it upfront, but you really want to have it. That's where "amortize" comes in.
To amortize something means to slowly pay off a debt or a big expense over a specific period of time. It's like breaking down the cost of that toy into smaller, more manageable parts. Instead of paying for it all at once, you can make smaller payments over several months or years until the debt is completely paid off.
You can think of it as if you're taking a really long road trip, and instead of driving for a super long time without stopping, you take breaks along the way to rest, eat, and enjoy the journey. Similarly, by amortizing a debt, you're taking small breaks from your regular income to pay off the expense bit by bit.
Now, "amortize" can also have another meaning, especially when we talk about things like loans or mortgages. In this case, it refers to the process of dividing the total amount of money borrowed into equal payments, including both the principal amount (the original amount you borrowed) and the interest (the extra money you pay for borrowing that money).
To make it easier to understand, think of it like baking a cake. You have all the different ingredients, like eggs, flour, sugar, and butter. When you blend them together and put the cake in the oven, it takes time for it to rise and cook all the way through. Amortizing a loan is a bit like baking that cake, with each payment period being a step in the process. You gradually pay off both the money you borrowed and the interest, just like the cake gradually cooks and rises.
So, in a nutshell, "amortize" means to spread out the cost of something over time by making regular payments, or it can refer to dividing a loan or debt into equal payments that include both the borrowed amount and the interest. It's all about making things more manageable, just like taking breaks on a long road trip or baking a delicious cake.
Hope that helps, and if you have any more questions, feel free to ask!
Revised and Fact checked by Olivia Davis on 2023-11-06 04:42:41
Amortize In a sentece
Learn how to use Amortize inside a sentece
- When you take a loan to buy a car, you can amortize the cost by paying a little bit of money each month over a long period of time.
- If you borrow money from your parents to buy a new phone, you can amortize the debt by giving them a small amount of money each month until you fully repay.
- Imagine you want to buy a bicycle that costs $200, but you don't have enough money right now. You can amortize the cost by paying $20 each month for 10 months.
- A friend lends you $50 to buy a video game, and you want to pay them back gradually. You can amortize the borrowed amount by giving them $10 each week for 5 weeks.
- Let's say you want to buy a toy that costs $30, but you only receive $5 as your weekly allowance. You can amortize the toy's price by saving $5 each week for 6 weeks.
Amortize Synonyms
Words that can be interchanged for the original word in the same context.
Amortize Hypernyms
Words that are more generic than the original word.