Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date.
-Amount Financed: $2500 Regular Monthly Payment: $55.61
Total Number of Payments scheduled: 60
Loan repaid in full instead of making: 36th payment

Question

Quizplus · Accepted Answer

The unearned interest using the actuarial method can be calculated by first determining the total interest paid if the loan were carried to term, then calculating the interest cost for the actual term the loan was held before being paid off, and finally subtracting the actual interest cost from the total interest cost to find the unearned interest. However, without the interest rate, a direct calculation here is not possible. The correct answer, given the options and the method described, is based on the actuarial calculations specific to the details provided, which typically involve complex financial formulas or a financial calculator to accurately determine.

Use the Actuarial Method to Find the Amount of Unearned