Solve the Problem Using the Rule of 78s

question 29

Multiple Choice

Solve the problem using the rule of 78s.
-Dallas Wright took out a 48-month fixed installment loan of $6500 to purchase a new all-terrain Vehicle (ATV) . He began making monthly payments of $175.50. Instead of making his 27th Payment, Dallas decides to repay his loan in full. How much interest will Dallas save?

• A) $377.93
• B) $29.30
• C) $358.19
• D) $1654.71

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Definitions:

Voidable Contract

A valid contract that can be legally voided at the option of one of the parties without penalty.

Quasi-contract

A legal concept that is treated as a contract so that one party is not unjustly enriched at the expense of another, even though no actual contract exists.

Implied in Law Contract

A contract created by a court, not through an agreement between parties, but to avoid unjust enrichment or injustice.

Contract with Robert

An agreement made with an individual named Robert, specifying obligations and rights concerning a particular matter or transaction.