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Definition of 'Rule Of 78'
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 to the sum of all the digits of the periods. The weights are applied in reverse, applying large weights to early periods.
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Investopedia explains 'Rule Of 78'
When paying off a loan, the repayments consist of two parts: the principal and the interest charge. The Rule of 78 weights earlier payments with more interest than later ones. If the loan is not terminated or prepaid early, the total interest paid between simple interest and the Rule of 78 will be equal. However, because the Rule of 78 weights the earlier payments with more interest than a simple interest method, paying off a loan early will result in the borrower paying more interest overall.
This method of allocating interest was commonplace in loans for consumer goods, such as automobiles. However, the U.S. government has outlawed the use of the Rule of 78 for loans longer than five years. This is largely because this method penalizes borrowers who pay off debts early.
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Search results for 'Rule Of 78'
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http://www.investopedia.com/exam-guide/finra-series-6/securities-markets/order-qualifiers.asp
... Passive; 10.6 Suitability Factors; 10.7 Investment Objectives; 10.8 FINRA Conduct
Rule 2310. ... may state, "It's 20 to 22, work out", or "The price is around 78-78 ...
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http://www.investopedia.com/exam-guide/series-26/retirement-college-plans/savings-goals.asp
... FINRA Conduct Rule 2830; 7.8 Execution of Portfolio Transactions; 7.9 FINRA Conduct
Rule 2310, 2330 ... Over the next 18 years, 78 million people will reach this age ...
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http://www.investopedia.com/exam-guide/finra-series-6/variable-contracts/default.asp
... Passive; 10.6 Suitability Factors; 10.7 Investment Objectives; 10.8 FINRA Conduct
Rule 2310. ... individual life expectancy rose by 10 full years, from 68 to 78 years ...
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http://www.investopedia.com/exam-guide/finra-series-6/retirement-college-savings-plans/default.asp
... Passive; 10.6 Suitability Factors; 10.7 Investment Objectives; 10.8 FINRA Conduct
Rule 2310. 11. ... Over the next 18 years, 78 million people will reach this age. ...
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http://www.investopedia.com/articles/optioninvestor/07/affordable-hedging.asp
... 78, 157, 4.85, 0.031. 78, 248, 5.80, 0.023. 78, 540, 8.00, 0.015. ... As a rule, longer
term put options with a lower strike price provide the best hedging value. ...
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http://financialedge.investopedia.com/financial-edge/0711/Potholes-In-The-Golden-BRIC-Road.aspx
... scores the worst at a very low 154, while China and India come in at 78 and 87 ... Rule
of Law The idea of the rule of law is closely related to corruption, but it ...
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http://financialedge.investopedia.com/financial-edge/1211/Are-Technology-Stocks-In-Trouble.aspx
... and Netflix, the company that redefined the video rental market, has plunged 78%
this year. ... If you're a technology investor, you know that the old rule is that ...
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http://www.investopedia.com/exam-guide/series-7/getting-started/statistical-concepts.asp
... Observation, X, X - µ, (X - µ) 2. 1. 78, 3.85, 14.82. 2. 76, 1.85, 3.42. 3. 59,
-15.15, 229.52. 4. 88, 13.85, 191.82. ... 12. 81, 6.85, 46.92. 13. 78, 3.85, 14.82. 14 ...
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http://financialedge.investopedia.com/financial-edge/0210/Life-Of-A-20-Bill.aspx
... As a rule, my cousins the $1, $5 and $10 bills last between 1.3 and ... According to
a study by the Argonne National Laboratory, 78% of bills from Miami , Houston ...
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http://stocks.investopedia.com/stock-analysis/2012/Using-The-Pullback-In-Gold-GLD-GDX-GDXJ-RGLD0109.aspx
... This is not always the case, but can be used as a general rule of thumb. ... The ETF
is made up of mainly US and Canadian miners (78%) and the two largest holdings ...
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