Related Words

Amortization: Amortization is payments of debt in equal instalments of principal and interest, rather than interest only payments.

Amortization Factor: The pool factor implied by the scheduled amortization assuming no prepayments.

Effective-Interest Amortization: A method of systematically writing off a bond premium or discount that takes into consideration the time value of money and results in an equal rate of amortization for each period.

Negative Amortization: When your loan principal increases rather than decreases because your monthly payment isn’t enough to cover the loan interest, that’s called negative amortization. This can happen if you hav . . . View Full Definition

Earnings Before Interest, Taxes, Depreciation, And Amortization (EBITDA): A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of i . . . View Full Definition

Earnings Before Interest Tax Depreciation And Amortization (EBITDA): Is used to isolate operating numbers from long-term costs -- for example, goodwill resulting from a flurry of acquisitions.

Loan Amortization Schedule: The timetable for repaying the interest and principal on a loan.

Straight-Line Amortization: A method of systematically writing off a bond discount or premium in equal amounts each period until maturity.

Planned Amortization Class (PAC): (1) The class of CMO that has the most stable cash flows and the lowest prepayment risk of any class of CMO Because of a stable cash flow, it is considered the least risky CMO (2) A CMO bond . . . View Full Definition

Targeted Amortization Class (TAC) Bonds: A monetary system under which countries pledge to maintain their exchange rates within a specific margin around agreed-upon, fixed central exchange rates.