math

A $400 loan is to be paid off in 66 monthly payments of $11.62. The borrower decides to pay off the loan after 18 payments. Use the rule of 78s to find the amount of interest saved. (Points : 1)
$194.13

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  1. I get a slightly different amount.

    66 payments of 11.62 = $766.92
    Finance charge = $766.92 - 400 = 366.92

    Cumulative month-interest charges for 66 months
    = 66*67/2 = 2211
    Cumulative month-interest charges left to be paid after 18 months (66-18=48 months)
    = 48*49/2 = 1176
    Interest charges saved
    = 1176/2211 * 366.92
    = $195.16

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  2. I too get the second answer and this is the correct one:

    A $400 loan is to be paid off in 66 monthly payments of $11.62. The borrower decides to pay off the loan after 18 payments. Use the rule of 78s to find the amount of interest saved.

    Answer: $195.16

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