what is the sum of the number of months remaining on a loan divided by the sum

Accounting
Tutor: None Selected Time limit: 1 Day

of the total number of months of the loan A)Constant ratio   B)Finance charge   C)Rule of 78     D)Refund Fraction

Jun 25th, 2015

hello...thank you for the opportunity to help you with your question!

the answer is C.Rule of 78.

its  used to allocate interests charges across payment periods of a loan. the periods are weighted by comparing their value with the sum of all the digits and the weights are applied in reverse applying greater weights to earlier periods.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 25th, 2015

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