Explanation This method states that, the lender earns more interest at the early stage of the loan when most of the amount lies with borrower, than in the later stage. In this method, the finance charge is divided into parts equal to the sum of the digits of the months of the loan. As the sum of the digits of a 12 -month loan is 78 , it can also be termed as Rule of 78 . Sum - o f - t h e - d

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

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Chapter 13, Problem 14CR

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To fill: The blank space provided for the statement, “The most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-_ method or the Rule of _”.

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Contemporary Mathematics for Business & Consumers

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The blank space provided for the statement, “The most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-_____ method or the Rule of _____”.

Solution Summary: The author explains the most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-digits method or the Rule of 78.

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To fill: The blank space provided for the statement, “The most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-_____ method or the Rule of _____”.

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The blank space provided for the statement, “The most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-_ method or the Rule of _”.

To fill: The blank space provided for the statement, “The most common method for calculating the finance charge rebate of an installment loan is known as the sum-of-the-_ method or the Rule of _”.