Use the Rule of 78 to Find the Payoff Amount

question 38

Multiple Choice

Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity.
-Amount Financed: $25,000 Regular Monthly Payment: $656.25
Total Number of Payments scheduled: 48
Loan repaid in full instead of making: 27th

• A)$12,504.46
• B)$13,379.78
• C)$13,160.71
• D)$12,571.14

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Definitions:

Cash Flow Estimation

The process of predicting the amount of money that will move in and out of a business in a future period.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.

Accounts Payable

Liabilities of a business that represent amounts owed to creditors for goods and services received but not yet paid for.