Rule Of

Definition of "Rule of 78"

Gene Barginear
  U-Sell By Owner- Residential Brokerage

Also called the Rule of the Sum of the Digits. An approach that bank use to formulate a
loan amortization schedule. It results in a borrower paying more interest in the beginning of a
loan when he/she has the use of more of the money, and less interest as the obligation is reduced.
Interest can be saved by preparing the loan.

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