Solve the problem using the rule of 78.
-A fisherman buys a new boat for $50,000. He makes a down payment of $17,000 and finances the balance at 8.5% APR over 60 months. Before making the 50th payment, the fisherman decides to
Pay the remaining balance on the loan. How much interest will the fisherman save?

Question

Quizplus · Accepted Answer

The Rule of 78 is used to calculate interest rebates on loans paid off early. The total interest is calculated, and then the interest saved is determined by the sum of the remaining months' digits divided by the sum of all months' digits. Here, the fisherman saves interest for the last 10 months.

Solve the Problem Using the Rule of 78