Amortalization
periodic payment plan to pay a debt in which the interest and a portion of the
principal are included in each payment by an established mathematical formula;
by figuring the interest on the declining principal and the number of years of
the loan, the monthly payments are averaged and determined; since the main
portion of the early payments is interest, the principal does not decline
rapidly until the latter stages of the loan term; if the amortization leaves a
principal balance at the close of the time for repayment, this final lump sum is
called a "balloon" payment