What is another word for effective interest amortization?
Pronunciation: [ɪfˈɛktɪv ˈɪntɹəst ɐmˌɔːta͡ɪzˈe͡ɪʃən] (IPA) 
Effective interest amortization refers to the process of allocating interest expense over the useful life of a bond or loan. Alternative terms for this concept include effective interest rate method, effective interest method, and amortization of premium/discount. The underlying principle is to record interest expense in a systematic and consistent manner over the course of the borrowing, rather than simply recognizing it as a lump sum payment at the end of the term. Other related terms include interest rate spread, bond yield to maturity, and amortization schedule. Regardless of the specific vocabulary used, the goal is to accurately account for the cost of borrowing money and maintain proper financial records.
