Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity.
-Finance charge: $340 Total number of payments: 26
Amount per payment: $186
Remaining number of payments, when paid in full: 3

Question

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The Rule of 78 is used to calculate the interest rebate on a loan paid off early. The sum of the digits for 26 payments is 351. The remaining interest for 3 payments is calculated as (3+2+1)/351 * $340 = $5.81. Subtract this from the total finance charge to get the rebate. The payoff amount is the remaining principal plus the rebate, which is $186 * 3 + $5.81 = $738.19.

Use the Rule of 78 to Find the Payoff Amount