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From: phil@unisoft.UUCP (Phil Ronzone)
Newsgroups: net.consumers,net.misc
Subject: Re: What is "rule of 78's"?
Message-ID: <239@unisoft.UUCP>
Date: Wed, 21-Mar-84 15:00:15 EST
Article-I.D.: unisoft.239
Posted: Wed Mar 21 15:00:15 1984
Date-Received: Fri, 23-Mar-84 08:39:40 EST
References: <1070@proper.UUCP>
Organization: UniSoft Corp., Berkeley
Lines: 8
Keywords: rule of 78's,loans,accounting

Rule of 78: when you borrow money, say for a year,
and thus have a year, or 12 months to repay it in,
it is assumed that you have use of 12 parts of the money
for the first month, 11 parts of the money the next month,
10 parts of the money the next month, .....
12 + 11 + 10 + ... = 78. It is most often dealt with when
prepaying a loan, since most loans have equal monthly payments,
with the principal and interest payments varying.