Question

At maturity, using the U.S. Rule, the interest calculated from the last partial payment is

A. subtracted from beginning balance.
B. subtracted from adjusted balance
C. added to beginning balance.
D. added to adjusted balance.

Answer 1

The interest calculated from the last partial payment is added to the adjusted balance when using the U.S. Rule to calculate compound interest.

Step-by-step explanation:

When using the U.S. Rule to calculate compound interest, the interest calculated from the last partial payment is added to the adjusted balance.

For example, let's say you have a loan with a principal of $1000, an interest rate of 5%, and a term of 1 year. If you make a partial payment of $500 at the end of 6 months, the interest calculated on that partial payment would be added to the adjusted balance.