A mathematical formula for calculating the amount of interest to be rebated to a borrower who repays or refinances an amortized loan prior to the scheduled maturity. The calculation assumes the initial payments of an installment loan go mostly toward interest, so that consumers receive a meager refund when they prepay a loan. Most installment-loan agreements now use simple interest, so the rule of 78s is not applicable. Also called sum-of-the-years method.