Actual/360 vs Actual/365 Interest Calculator

How it works

Actual/360: I = P × r × actual days ÷ 360 · Actual/365: I = P × r × days ÷ 365 · 30/360: days = 360(Y₂ − Y₁) + 30(M₂ − M₁) + (D₂ − D₁) with day 31 treated as 30 · Actual/Actual: each year’s days ÷ that year’s length (365 or 366)

The “annual” rate on a loan or deposit only becomes money once a day-count convention turns days into a fraction of a year. Commercial loans, many Latin American banks (the “año comercial”), money markets and some mortgages use Actual/360: you pay interest for every calendar day but divide by 360, so a full year costs 365/360 of the stated rate — about 1.4% more interest. Bonds often use 30/360 or Actual/Actual, and consumer deposits usually Actual/365. Check the convention in the contract before comparing two quoted rates.

Worked example

Interest on 100,000 at 10% from January 1, 2026 to January 1, 2027 (365 actual days): Actual/365 gives 10,000.00, as do 30/360 (360 days ÷ 360) and Actual/Actual, but Actual/360 gives 100,000 × 10% × 365 ÷ 360 = 10,138.89 — 138.89 more, an effective 10.139% rate.

Sources: Wikipedia — Day count convention

Frequently asked questions