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Amortization
Loan repayment schedule that shows how much of each monthly installment payments are applied to principle and payment applied to interest.
Amortization is the reduction of the principal of a debt in regular, periodic installments over a specified time and at a specified interest rate. Generally, amortization schedules are "front-loaded" heavily towards interest payment in the early years of the loan, then gradually shift more towards paying more towards principle.
This front-end weighting towards interest early on ensures that the banks get their money early in the loan period, when it is worth more at net present value.
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