A formula used to determine rebates on interest for installment loans. For a 12 month loan: 1 + 2 + ... + 12 = 78. After the first month, 12/78th of the interest is owed, 11/78ths after the second month, etc.
Related information about Rule of 78:
- Rule of 78s - Wikipedia, the free encyclopedia
The denominator of a Rule of 78 loan is the sum of the digits, the sum of the number of monthly payments in the loan. For a 12 month loan, the sum of numbers ...
- A quick explanation of the "Rule of 78"
Occasionally on The Money Show (FM 96.9, WTKK Boston), Rick Shaffer mentions the Rule of 78 in connection with auto loans but declines to explain it in detail ...
- Rule of 78 Loan Calculator
Rule of 78 Loan Calculator determines the payment schedule for a Rule of 78 loan by calculating the magic number necessary to split the compounded interesti ...
- Rule Of 78 Definition | Investopedia
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 ...
- What is rule of 78? definition and meaning
Definition of rule of 78: Method of computing interest-refund on a fixed installment loan (with add on interest) that is paid-off before its full duration (maturity).
- WHAT IS THE RULE OF 78s - Mississippi Department of Banking ...
Licensee, with such refund being calculated under the Rule of 78's,unless ... In calculating a Rule of 78's refund, one (1) day shall constitute a full month earned.
- Rule of 78 -- Watch out for this auto loan trick
Aug 27, 2001 ... The Rule of 78 is one rebate auto shoppers should avoid. It's actually a sneaky prepayment penalty.
- Rule of 78 - Financial Dictionary - The Free Dictionary
A practice in which lenders amortize repayment of short-term loans in a way that the borrower pays most of the interest earlier. For example, in a 12-month loan, ...