6.1-330.86 - (Repealed effective October 1, 2010) The Rule of 78. - Virginia Statutes

§ 6.1-330.86. (Repealed effective October 1, 2010) The Rule of 78.

A. The Rule of 78 is so named because the months of one year, i.e., onethrough twelve added together, total seventy-eight.

B. To determine the amount of the rebate of unearned interest under the Ruleof 78 on a loan where payment is anticipated:

1. Determine the number of months over which the loan is to be repaidaccording to its terms. Write the numbers in sequence and add (for example,for a four-year loan write the numbers one through forty-eight). The totalwill be the denominator of a fraction to be determined below.

2. Determine the number of months remaining on the loan after payment isanticipated. Write in inverse sequence and add (for example, for a four-yearloan anticipated after the third month, write the numbers forty-five back toone). The total will be the numerator of the fraction of which subdivision 1of this subsection is the denominator.

3. Multiply the original amount of interest that would have been paid overthe life of the loan by the fraction derived in subdivisions 1 and 2 of thissubsection. Such figure, so determined, is the amount to be rebated.

C. Payment anticipated between scheduled payment dates shall not beconsidered but instead the succeeding scheduled payment date shall be used indetermining the rebate under subsection B of this section.

(1987, c. 622.)