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A borrower decides to pay off a closed-end loan earlier than
originally scheduled. The amount by which the finance charge
is reduced is the unearned interest.
This software
calculates unearned interest using the actuarial method and the rule
of 78. Very useful program!
Actuarial Method
You borrow $4,000 to purchase office
equipment. The loan contract states an APR of 12.9% and stipulates
28 monthly payments of $166.20 each. You decide to pay the loan in
full at the time of the 19th payment. The unearned interest (the
amount by which the original finance charge is reduced, that is, the
amount of interest you will save) is $77.32. You must pay $1,584.67
to pay off the loan.
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Type in the loan
amount, annual interest rate and term of loan.
Then hit the calculate button. |
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We ask that if you like this calculator,
that you add one of the following links to your website:
Amortization
Software
Generate fixed, variable or
interest-only amortization schedules.
Mortgage Calculators
Track
loans with ease. Add, edit, or delete to manage irregular payments.
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