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Look at the socket? Are there two contacts? If so, 7528 (or 1157, same thing) is correct (and that's what the parts catalog will show). However, in the case of my 1991 740, there is only one contact in each socket. If that is the case use an 1156 bulb.
I spoke with an expert Volvo mechanic and he told be Volvo used two different tailight assemblies, a Hella and another one I can't recall by name. He said there appears to be no rhyme or reason as to what car has what, and this is the reason for the discrepancy in the proper bulb. The only way to know for sure what you have is a visual inspection on the unit.
check the fuse on the left fender about mid fender up near top edge. its in a rubber holder and is a sigle fuse. pull it out and look for heat damage on the fuse and holder. if damaged replace fuse holder and fuse
Chilton or Haines publishes manuals for the 740. Of the two, the Haines offers more direct parts removal and replacement info. The Chilton has too much generic filler. Get either on Ebay for less than $20.
sounds like a bad alternator. as an alternator puts out improper voltages, it can cause warning lights to come on, as the system voltage being too low will not allow the computer to run its self tests within their programmed parameters.