Day-count convention

How it is used

Names such as Actual/360 identify a convention; specify it alongside the rate and period.

Example sentences

1. The loan uses an Actual/360 day-count convention for accrued interest.

   The year denominator affects interest even when the quoted rate is unchanged.

2. A different day-count convention explained the discrepancy between the two calculations.

   Different conventions can produce different amounts for the same dates.

Common collocations

• apply a day-count convention
• Actual/365 day-count convention

Related terms

• accrueTo build up gradually over time, as interest does on a loan or deposit; in accounting, to record income or costs when they are earned or incurred, not when cash moves.
• interest rateThe price of borrowing money, shown as a percentage of the amount borrowed or saved for a period, usually one year.

More terms: Interest & Exchange Rates

• fixed rate
• variable rate
• APR
• exchange rate
• foreign exchange
• compound interest
• maturity
• basis point
• policy rate
• inflation
• spread
• simple interest