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What is the difference between energy and inertia?
Effective-Interest Method
A method of calculating the amortized cost of a bond and the amount of interest expense over its relevant period.
Amortization
The process of spreading out the cost of an intangible asset over its useful life or the repayment of loan principal over time.
Interest Expense
The cost incurred by an entity for borrowed funds over a period, reflected in its income statement.
Contractual Interest Rate
The agreed-upon rate of interest to be paid on loans or bonds, specified within a contract.
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