installment

installment definition - business

installment

A partial payment on a financial obligation. For example, an annual or monthly payment to the seller of an asset, such as a farm, on a long-term contract is an installment. Installments are comprised partly of principal and partly of interest. If all the installments are of equal size, each subsequent payment incorporates an increasing amount of principal and a decreasing amount of interest.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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