The Rule of 78s is a method used to calculate the interest charged on installment loans with add-on interest. It is based on the sum of the digits from 1 to 12 for a 12-month loan.
Unearned Interest refers to interest that has already been collected on a loan but cannot yet be counted as book earnings. This category of interest includes prepaid interest, which is taxable upon receipt by both cash or accrual basis taxpayers.
Unearned interest refers to the interest collected on a loan by a lending institution, which has yet to be recognized as income. This article explores its definition, mechanisms, calculation methods, and more.
