Problema Solution
Sheila borrowed $5000.00 for 3 years. Her monthly payments are $180. If she decides to pay the loan off after 6 months, find the amount of interest that she will save. (Use the rule of 78s.)
Answer provided by our tutors
here amount is 5000 and interest
rate of interest=180/5000=0.036 or 3.6 per month.
according to rule of 78s
interest=5000*0.036*(1+2+3+4+5+6)=21*0.036*5000=3780
amount=5000+3780=8780
amont after 6 month(compund interest)= 5000(1.0036)^6=6181.9=$6182
amont after 6 month (simple interest)= 5000+5000*0.036*6=$6080(interest=$1080)