amortization

• Amortization


  Paying debts with regular payments, used to periodically lower the book value of a loan or intangible asset over a set period
• Annually


  Once per year
• Annuity/Annuities


  A series of payments required for a specific number of periods
• Annuity certain


  An annuity in which payments begin and end at definite times
• Annuity due


  A type of annuity in which the payments are made at the beginning of each payment interval
• Bond


  Form of loan that can be traded in through the PDEX System
• Contingent Annuity


  An annuity in which the payments extend over an indefinite (or indeterminate) length of time
• Conversion Periods


  The time between successive conversions of interest into principal
• General Annuity


  An annuity where the payment interval is not the same as the interest period
• Housing Loan


  Example of an amortizing loan
• Amortization Schedules/Table


  Used by lenders, such as financial institutions, to present a loan repayment schedule based on a specific maturity date
• Compound Interest


  You earn interest on the money you've saved and on the interest you earn along the way
• Debt


  An obligation that requires one party, the debtor, to pay money borrowed or otherwise withheld from another party, the creditor
• Deposit


  To place especially for safekeeping or as a pledge; especially, economics: to put in a bank
• Intangible Asset


  An intangible asset is an asset that is not physical in nature, such as a patent, brand, trademark, or copyright
• Interest


  The rate a lender or investor receives based on the Principal amount
• Loan


  Sum of money borrowed that is expected to be paid back with interest
• Monthly


  12 times a year
• Mortgage


  A legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt
• Nominal Rate


  The real interest rate plus a projected rate of inflation
• Ordinary Annuity


  A type of annuity in which payments are made at the end of each payment interval
• Outstanding Balance


  Most often, it refers to the amount you owe from purchases and other transactions made with your credit card. It's also called your current balance
• Philippine Dealing and Exchange System (PDEX)


  A dealing exchange for major banks in the Philippines
• Principal Amount


  Initial amount borrowed, but it also refers to initial amounts of investments and deposits
• Principal Payment


  A payment toward the original amount of a loan that is owed
• Quarterly


  4 times a year
• Retirement Account


  A plan for setting aside money to be spent after retirement
• Simple Annuity


  An annuity where the payment interval is the same as the interest period
• Simple Interest


  The interest charge on borrowing that's calculated using an original principal amount only and an interest rate that never changes
• Semi-annually


  Twice a year
• Annuity Terms


  • Annuitant
  • Accumulated Interest
  • Annual Reset
  • Contract Owner
  • Deferred Annuity
  • Principal
  • Withdrawals
  • Policy
  • Premium
  • Prospectus
• From this lesson we have tackled topics regarding amortization. From discussing the definition itself and applying the mathematical concepts, it is safe to say that everyone can take something from it. Starting from the definitions, we are able to differentiate bonds, amortizations, and loans. The Philippine Dealing and Exchange (PDEX) System was also mentioned which gives the student a possible stepping stone to learn more about the Philippine Financial System. An example of an amortization table was shown which helps visualize how the different elements of amortization affect each other.
• From the table itself, we can see the different terms that is used in amortization. From here, annuity is given its definition which is that it is a series of payments over a specific number of period. Furthermore, annuities can be classified by 3 types; according to payment interval and interest period, according to time of payment, and lastly, according to duration.