The percentage which, when applied directly to the face value of a debt, develops the annual amount of money necessary to pay a specified net rate of interest on the reducing balance and to liquidate the debt in a specified time period. For example, a 6% loan with a 20- year amortization has a constant of approximately 81?2%. Thus, a $10,000.00 loan amortized over 20 years requires an annual payment of approximately $850.00.