Do the Math #5: Rule of 78s. Aaron Carson of Hays, Kansas, obtained a two-year installment loan for $1,500 to buy some furniture eight months ago. The loan had a 12.6 percent APR and a finance charge of $204.72. His monthly payment is $71.03. Aaron has made eight monthly payments and now wants to pay off the remainder of the loan. The lender will use the Rule of 78s method to calculate a prepayment penalty.

a) How much will Aaron need to give the lender to pay off the loan? b) What is the dollar amount of the prepayment penalty on this loan?