Using the Rule of 78, Find the Amount of Unearned

question 6

Multiple Choice

Using the Rule of 78, find the amount of unearned interest for the loan paid in full before the date of maturity. Round to the nearest cent.
-Finance charge: $9,325
Total number of payments: 61
Remaining number of payments, when paid in full: 35

• A)$3,210.25
• B)$2,934.10
• C)$3,106.69
• D)$3,031.90

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Definitions:

Debtor Default

A situation in which a debtor fails to meet the legal obligation of debt repayment, possibly leading to legal action by the creditor.

Secured Party

An individual or entity that holds an interest, typically a security interest, in the debtor's collateral to secure payment or performance of an obligation.

Purchase-Money Security Interest

A legal claim or lien on collateral that secures payment of the price of goods bought.

Secured Interests

legal claims or liens on collateral property or assets that secure the repayment of a debt or obligation.