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In some jurisdictions, when a payment on a regular compound interest (effective rate) loan is late or otherwise irregular, the simple interest method is used to calculate the interest for the arrears period. The frequency with which interest is compounded varies according to the type of loan, certain legislation and industry practice. When you want to pay off a precomputed account ahead of your contractual obligation, you are entitled to a rebate of the unearned finance charge based on the sum of the balances known as the Rule of 78s. This makes for simple calculations and is often used in vehicle finance, but the buyer precomputed interest calculator isn't always aware that the interest charged is almost double the stated rate.

Thus, its not always easy to navigate these waters. Nothing seems simpler or less interesting than calculating interest.

Should less interest be paid in February than in a 31-day month. The APR is a standardized rate (expressed as a percentage), which takes into account all compulsory fees associated with a loan.

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