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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Amortization

Definition:

The process of assigning costs or revenues across time.

Example

You license 1 year of house-sitting duties on an as-needed basis for $1,200. You are paid all $1,200 up front. But you might be fired after 3 months. Or you might quit after 9. You amortize the value of that contract as $100 a month over the life of the license.