Solve the Problem Using the Rule of 78

question 99

Multiple Choice

Solve the problem using the rule of 78.
-Caroline Jones took out a 48-month fixed installment loan of $21,000 to open a restaurant. She began making monthly payments of $520.63. Caroline's business does better than expected and
Instead of making her 24th payment, Caroline decides to repay her loan in full. What is the total
Amount due to pay off the balance?

• A)$11,477.14
• B)$12,280.54
• C)$11,997.77
• D)$11,518.72

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Definitions:

Pure Monopolist

A market situation where a single company is the sole producer and seller of a product or service, without any close substitutes.

Nondiscriminating Monopolist

Refers to a monopolist who charges all consumers the same price for its product or service, as opposed to price discrimination practices.

Pure Monopolist

A market structure where a single seller controls the entire supply of a product or service, and no close substitutes exist.

Maximum Profits

The highest level of profit a firm can achieve when it operates at its most efficient production level and pricing strategy.