A $400 loan is to be paid off in 66 monthly payments of $11.62. The borrower decides to pay off the loan after 18 payments. Use the rule of 78s to find the amount of interest saved. (Points : 1)

Question

$194.13

Answer 1

I get a slightly different amount.

66 payments of 11.62 = $766.92
Finance charge = $766.92 - 400 = 366.92

Cumulative month-interest charges for 66 months
= 66*67/2 = 2211
Cumulative month-interest charges left to be paid after 18 months (66-18=48 months)
= 48*49/2 = 1176
Interest charges saved
= 1176/2211 * 366.92
= $195.16

Answer 2

I too get the second answer and this is the correct one:

A $400 loan is to be paid off in 66 monthly payments of $11.62. The borrower decides to pay off the loan after 18 payments. Use the rule of 78s to find the amount of interest saved.

Answer: $195.16