Which process refers to funding and gradual payment of a debt over time?

Amortization is the process of gradually paying off a debt over time through scheduled payments. In this context, the payments typically include both principal and interest, allowing the borrower to reduce the total outstanding balance steadily. This method is commonly used in mortgages and loans, providing a structured timetable for repayment that makes it easier for borrowers to manage their finances.

The term amortization specifically relates to how the debt is systematically reduced, with each payment serving to lower the remaining principal until the loan is fully paid off by its maturity date. This clear framework contrasts with the other options listed. For instance, a deposit pertains to a lump sum payment made upfront, while financing generally refers to the broad act of providing funds for a purchase. A lease involves paying for the use of an asset over time without ownership, rather than paying down a debt. Thus, the concept of amortization is distinct in its focus on debt reduction through regular payments.