Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date.
-Amount Financed: $23,000 Regular Monthly Payment: $583.34
Total Number of Payments scheduled: 48
Loan repaid in full instead of making: 36th payment

Question

Quizplus · Accepted Answer

The correct answer is A because the unearned interest for the loan paid in full before the due date is $364.93. This is calculated by multiplying the regular monthly payment by the number of payments remaining on the loan. In this case, the regular monthly payment is $583.34 and the number of payments remaining on the loan is 36. Therefore, the unearned interest is $583.34 x 36 = $364.93.

Use the Actuarial Method to Find the Amount of Unearned