When you amortize a loan, you "kill it off" gradually by paying it down in installments. This is reflected in the word's etymology. Amortize derives via Middle English and Anglo-French from Vulgar Latin admortire, meaning "to kill." The Latin noun mors ("death") is a root of admortire; it is related to our word murder, and it also gave us a word naming a kind of loan that is usually amortized: mortgage. Amortize carries a different meaning in the field of corporate finance, where it means to depreciate the cost or value of an asset (as, for example, to reduce interest revenue on that asset for tax purposes).
Example Sentences
Recent Examples on the WebFor example, if a firm has investments in labor of $100,000 and employees typically remain at the firm for five years, investors might amortize that $100,000 at $20,000 per year for five years. Shivaram Rajgopal, Forbes, 15 June 2022 The carrier will also seek to amortize shares held by its treasury equal to about 2.4% of its total share capital. Rodrigo Orihuela, Bloomberg.com, 24 Feb. 2022 If one were to amortize development costs over 10 flights of the SLS rocket and Orion spacecraft, the $4.1 billion figure cited by Martin would easily double. Eric Berger, Ars Technica, 1 Mar. 2022 Called Origin, the shuttles have been designed to have a million-mile lifespan, which will help the company amortize the cost over a longer period and reduce annual expenditure, according to Mr. Nash. Nina Trentmann, WSJ, 23 Feb. 2022 The early pickup will allow the conglomerate to amortize the cost of the show over two seasons. Lesley Goldberg, The Hollywood Reporter, 15 Feb. 2022 Prop houses and studios could amortize this cost by leasing the equipment out to other productions. Matt Donnelly, Variety, 12 Nov. 2021 Retailers that own facilities generally view them as long-term investments and amortize them over thirty to fifty years. Walter Loeb, Forbes, 1 Nov. 2021 Placing some series that originate on Fox Nation on Fox Business gives the company another way to amortize costs. Brian Steinberg, Variety, 20 Sep. 2021 See More
Word History
Etymology
Middle English amortisen to kill, alienate in mortmain, from Anglo-French amorteser, alteration of amortir, from Vulgar Latin *admortire to kill, from Latin ad- + mort-, mors death — more at murder