At maturity, using the U.S. Rule, the interest calculated from the last partial payment is:

A. Subtracted from adjusted balance
B. Added to beginning balance
C. Subtracted from beginning balance
D. Added to adjusted balance
E. None of these



Answer :

To answer this question, let's understand the U.S. Rule and its implications:

The U.S. Rule is a method used to calculate the balance of a loan when partial payments have been made before the final maturity date. The rule dictates how interest and principal are credited when these partial payments are made.

Here's what happens under the U.S. Rule:
1. When a partial payment is made, it is first applied to the interest that has accrued since the last payment.
2. Any remaining amount from the partial payment is then applied to reduce the principal balance of the loan.
3. At maturity, the interest that is calculated from the last partial payment is generally accounted for in the final settlement of the loan.

Given that the question specifically asks what happens to the interest calculated from the last partial payment at maturity under the U.S. Rule, we need to identify where this interest amount is applied in the final accounting.

The correct option is:
Added to adjusted balance

This is because the interest accrued from the last partial payment is added to the final adjusted balance to determine the total amount due at maturity.

So the correct choice in the multiple-choice options is:
- Added to adjusted balance