Please use simple language and avoid economic terms. An example will be appreciated.
2007-03-19 01:11:23 · 2 answers · asked by taurus0092 1 in Social Science ➔ Economics
Amortised cost is the total cost you have to pay when you pay for something using amortisation.
Amortisation is how things like car loans and credit cards are paid for: where you buy something, pick a date in the future when you want to finish paying for it, and then figure out even payments for the item over that time, that include interest as well.
Since you are paying over time (sometimes years with a bigger loan), you have to pay interest because money actually becomes worth less ($100 today buys less than $100 50 years ago).
The Amortised Cost is thus how much you are paying in total for the item when you add in all the interest you have to pay as well.
See the source link for more information, including the formula for figuring out the cost based on a given interest rate.
2007-03-19 10:15:47 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It is all of the interest or costs that go along with it.
For example, you buy something for $100 on your credit card and don't pay it off for six months.
The amortized cost would be like @$130.
Its the whole cost.
2007-03-19 02:58:44 · answer #2 · answered by Santa Barbara 7 · 0⤊ 0⤋
This Site Might Help You.
RE:
What is AMORTISED COST?
Please use simple language and avoid economic terms. An example will be appreciated.
2015-08-14 01:58:39 · answer #3 · answered by ? 1 · 0⤊ 0⤋