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:

Scanlon Plan

A participative management approach focusing on employee involvement in improving productivity and sharing the resulting cost savings as bonuses.

Gain-Sharing

A performance-based compensation strategy where employees receive bonuses based on the company's savings or increased profitability due to their efforts.

Pay Secrecy

Policies or practices that restrict employees from sharing or discussing their salary information with others.

Merit Pay Plan

A compensation strategy that rewards employees based on their performance and achievements rather than their position or seniority.