Using Rule of 78s to find loan amount, amount saved

patti72458

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Joined
May 7, 2006
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26
Sean purchased a new couch and love seat for his living room for $4500. He made a down payment of $1550 and financed the balance with a 24-month fixed-payment installment loan. Instead of making the eleventh payment of $144.17, he decides to pay off the loan.
A) how much interest will sean save? ( use the 78s rule)
B) what is the amount due to pay off the loan?

rule of 78s: f*k(k+1)/n(n+1)
 

tkhunny

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Apr 12, 2005
Messages
11,317
Didn't we just do this one?

$4500 - $1550 = $2950 -- Total Amount Financed

Oh, Look! New information. We are now to use the Rule of 78's. Well, that will save much less interest.

Go ahead. Let's see what you get.
 
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