### Question
How does the law define actuarial method?


### Answer
Under *12 U.S.C. § 1735f*, **actuarial method** is defined as:

> the method of allocating payments made on a debt between the outstanding balance of the obligation and the precomputed finance charge pursuant to which a payment is applied first to the accrued precomputed finance charge and any remainder is subtracted from, or any deficiency is added to, the outstanding balance of the obligation

#### Citation:
  - *12 U.S.C. § 1735f*
  - Heading: **CHAPTER 13-NATIONAL HOUSING > SUBCHAPTER V-MISCELLANEOUS**

