Amortization it is a process that extinguishes debts through periodic payments, it is the extinction of a debt through discharge of the same.
In repayment, each installment is a portion of the total amount, including interest and the remaining outstanding balance. Amortization is a term widely used in accounting, financial management and mathematics. Amortization is the sum of the repayment of the principal or the payment of interest on the outstanding balance.
Amortization is also present in the accounting area, which is the process that makes the assets classified in the account of the balance sheet, and can also be related to depreciation, which is the reduction in the value of assets as they are used.
Within the amortization, the terms are included, which is the time necessary for the payment of all installments; the amortization installments, which is the value returned periodically and the installments, which is the sum of the amortization, with the addition of interest and taxes.
There are several amortization systems, the best known is the French system, also called the price table, which is when the payments are equal throughout the period, the American amortization system, which is when the payment is made at the end, and the amortization system is constant and mixed.