Solve the Problem Using the Rule of 78s

question 75

Multiple Choice

Solve the problem using the rule of 78s.
-Carlo has a 36-month fixed installment loan, with a monthly payment of $369.72. The amount he Borrowed was $11,000. Instead of making his 30th payment, Carlo is paying the remaining balance On the loan. What is the total amount due to pay off the balance?

• A) $2163.33
• B) $1888.04
• C) $2515.22
• D) $2145.50

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Definitions:

Business Combination

A transaction or event in which an acquirer takes control of one or more businesses, such as through merger or acquisition.

Amortized

The process of gradually writing off the initial cost of an asset over a period, in accordance with its estimated useful life.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.