Websites that offer free amortization software include Download.com, Microsoft.com and QuantechSoftware.com. Download's Loan Amortization Schedule for Excel is an XLS file with embedded formulae. Microsoft's Amortization Schedule Calculator is PC app that allows users to compute payment schedules and save them into Excel. Quantech's Amortizer was developed for commercial loans and can deal with both fixed and irregular payments.
Amortization is the process of paying off an amount over a period of time. Mortgages and car loans are examples of debts that are amortized. Part of each payment goes towards repaying the amount originally borrowed, the remainder pays off the interest charged on the capital sum. An amortization schedule shows the payments made against a loan and how the relationship between repayment of capital and interest changes over the period of the loan.
In business, amortization is used to allocate loans across different accounting periods. It is also used to spread the cost of capital expenses for intangible assets, such as patents, over their lifespan. Depreciation and depletion work in a similar way. Depreciation prorates a tangible asset's cost over its life cycle whilst depletion allocates the cost of natural resources over time. Amortization and depreciation are used interchangeably in some countries such as Canada.