Read about loan amortization
Amortization comes from that same Old French root as “mortgage” and means the “killing down” or “extinguishing” of debt over time. You may want to plug the loan amortization calculator’s output into Excel so that you can work with the numbers even further. By the 1970′s, it became obvious that more flexible repayment plans were needed to meet changing market requirements. Making extra payments, even one per year, will allow the borrower to shorten the overall term. Small business owners should realize, however, that not all assets are consumed by their use or by the passage of time, and thus are not subject to amortization or depreciation.