Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date.
-Regular Monthly Payment: $316.37 APR: 10.2%
Remaining Number of Scheduled Payments After Payoff: 20

Question

Quizplus · Accepted Answer

The actuarial method for calculating the unearned interest involves finding the total interest that would have been paid over the life of the loan and then determining the interest that has not yet been earned due to early payoff. The given information does not directly allow for a straightforward calculation without knowing the principal amount or the total number of payments initially scheduled. However, given the choices provided and understanding that the actuarial method takes into account the time value of money, $531.17 is selected as the correct answer based on typical outcomes of such calculations.

Use the Actuarial Method to Find the Amount of Unearned