INSTALLMENTS Meaning and
Definition
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Installments, typically known as "monthly payments" or "staggered payments," refer to a predetermined series of equal or varying amounts paid periodically to settle a debt or purchase an item over a specific duration of time. This fiscal arrangement allows individuals or organizations to make larger purchases or manage their financial obligations by dividing them into more manageable portions, rather than paying the full amount upfront.
When a purchase or debt is split into installments, the total financial obligation is divided into several parts, usually paid on a monthly basis, although the frequency can depend on the agreement between the parties involved. Each installment generally consists of an equal or fixed portion of the overall amount. For instance, a person buying a car might agree to pay $500 per month for 48 months, rather than paying the full cost upfront.
Installments often include an interest rate or fee for the convenience of spreading the payments over time. This interest amount or fee is usually determined based on factors such as the duration, the total amount, and the creditworthiness of the debtor. It serves as compensation for the lender or seller for not receiving the entire amount immediately.
Installments are commonly associated with loans, mortgages, car payments, and other substantial purchases that individuals prefer to pay off gradually. They provide flexibility and accessibility to individuals who may not have the means to make a substantial one-time payment, enabling them to budget their finances and meet their financial obligations or accomplish their purchase goals in a more feasible manner.
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Etymology of INSTALLMENTS
The word "installments" derives from the Old French term "esterler" which means "to arrange in order" or "to make regular payments". This term evolved into the Middle French word "estaler" which meant "to spend money in small payments". Eventually, it reached English as "installments" in the early 18th century, retaining its original meaning of making periodic payments to settle a debt or purchase.
Similar spelling words for INSTALLMENTS
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