Question

Use the rule of 78 to find the finance charge refund if the Finance charge was $476 on a 12 month payment plan and the loan was paid off with 5 payments remaining

Answer 1

Answer:

finance charge refund is $91.53

Step-by-step explanation:

given data

finance charge F = $476

time t = 12 month

no of payment n = 5

to find out

finance charge refund

solution

we will apply here finance charge refund formula that is

finance charge refund = F × $\frac{n * (n+1)}{t* (t+1)}$

put here value we get

finance charge refund = 476 × $\frac{5 * (5+1)}{12* (12+1)}$

finance charge refund = 476 × $\frac{5 * (6)}{12 * (13)}$

finance charge refund = 476 × $\frac{30}{156}$

finance charge refund = 476 × 0.1923

finance charge refund = 91.53

so finance charge refund is $91.53