§ 6.1-330.86. The Rule of 78
A. The Rule of 78 is so named because the months of one year, i.e., one through twelve added together, total seventy-eight.
B. To determine the amount of the rebate of unearned interest under the Rule of 78 on a loan where payment is anticipated:
1. Determine the number of months over which the loan is to be repaid according 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 total will be the denominator of a fraction to be determined below.
2. Determine the number of months remaining on the loan after payment is anticipated. Write in inverse sequence and add (for example, for a four-year loan anticipated after the third month, write the numbers forty-five back to one). The total will be the numerator of the fraction of which subdivision 1 of this subsection is the denominator.
3. Multiply the original amount of interest that would have been paid over the life of the loan by the fraction derived in subdivisions 1 and 2 of this subsection. Such figure, so determined, is the amount to be rebated.
C. Payment anticipated between scheduled payment dates shall not be considered but instead the succeeding scheduled payment date shall be used in determining the rebate under subsection B of this section.
(1987, c. 622.)
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