Which formula dictates that you pay more interest at the beginning of the loan and pay less and less interest as the debt is reduced?
A) Adjusted balance method
B) Previous balance method
C) The rule of 78s
D) Average daily balance
E) Accelerated balance

Question

Quizplus · Accepted Answer

The rule of 78s is a method of allocating interest charges that front-loads interest payments, meaning you pay more interest at the beginning of the loan term and less as the principal decreases.

Which Formula Dictates That You Pay More Interest at the Beginning