Use the Rule of 78 to Find the Amount of Unearned

question 127

Multiple Choice

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity.
-Finance charge: $24,359 Total number of payments: 38
Remaining number of payments, when paid in full: 5

• A)$346.50
• B)$519.75
• C)$328.73
• D)$493.10

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Definitions:

Nipper Pliers

A hand tool used for cutting, gripping, or twisting materials, especially useful in nail care and electric work.

Transverse

Lying across; the segment of large intestine that lies across the abdomen; a line drawn horizontally across the body or a structure.

Fracture

The sudden breaking of a bone.

Greenstick

A type of incomplete fracture in bones, most common in children, where the bone bends and cracks without completely breaking.