1. Ashley borrowed $2,000 from her bank to buy a new bedroom set. Interest on the loan totals $120, and the total of $2,120 is to be paid in 12 equal installments of $176.67. According to the Rule of 78s, how much interest will be rebated to Ashley if she pays off the loan after with the seventh payment?
2. Marcy has a balance of $300 on her credit card. She wants to use the card to purchase an item that will cost $200. Since her credit card has a grace period of 25 days, Marcy assumes that no interest will be charged on this new purchase if she pays it off within 25 days.
3. Blake is considering two consumer loans. Both loans charge the same interest rate but one uses the adjusted balance method to determine finance charges while the other uses the previous balance method.
A. adjust balance method all things being equal
B. choose method that results in highest finance
C. choose previous balance method all things being equal
D. Doesent matter both loans yield same interest.