Carson of Hays, Kansas, obtained a two-year installment loan for $1,500 to buy
some furniture eight months ago. The loan had a 12.6 percent APR and a finance
charge of $204.72. His monthly payment is $71.03. Aaron has made eight monthly
payments and now wants to pay off the remainder of the loan. The lender will
use the rule of 78s method to calculate a prepayment penalty.