Question

How does the rule of 78 work?

Answer 1

It is a method of allocating the interest charge on a loan avorss its payment periods. Periods are weighted by comparing their numerxal values to he sum of all the digits of the periods.The weights are applied in reverse applying large weights to the early periods.

Answer 2

The Rule of 78 is a method of allocating the interest charge on a loan across its payment periods. Under the Rule of 78, periods are weighted by comparing their numerical values to the sum of all the digits of the periods. The weights are applied in reverse, applying large weights too early periods.