Interest Calculation Method

The interest calculation method determines according to which time-dependent basis interest is calculated for mid-year payments. The various methods take differences in the length of the months and leap years into consideration in different ways.

The interest calculation method is defined by the quotients

days

---------------

daily basis

.

The methods for calculating the number of days of each calculation period (meaning the number in the counter) are:

ACT

The actual number of calendar days between two dates is calculated.

360

For this method the year is considered to have 360 days and a month 30 days. The 31st of a month is not considered to be an interest day.

Contrary to method 360E, the time from February 27 to February 28 is considered to be one day, the time from February 28 to March 1 as three days.

Example: Days Calculation Method 360

360E

For this method, used, for example, on the Euro market, the number of days results similarly to the formula above.

The number of days between two dates D1/M1/Y1 and D2/M2/Y2 is calculated as follows:

(Y2 - Y1)*360 + (M2 - M1)*30 + (D2 - D1)

The time between February 27 and February 28 of a year is calculated as three days.

Example: Days Calculation Method 360E

The following are defined for the daily basis (denominator value):

360

A year is considered to have 360 days.

365

A year is considered to have 365 days.

366

A year is considered to have 365 days, a leap year 366 days.

The system supports the following so far: