Nominal interest rate and effective interest rate converter help


Settings Remark
Days in year The number of days within a year can be set to:
  • 366 days
    This is a leap year (normal year + 1 day extra (29 feb)

  • 365 days
    Normal year (non leap year)
    Interest rate using a 365-day year is called exact interest.

  • 364 days
    The 364 day year derives from 52 weeks * 7 day weeks = 364 days in a year.

  • 360 days
    When a month has 30 days, a year has 12 months * 30 = 360 days
    Interest rate using a 360-day year is called ordinary interest.

The number of days within a year is important when compounding period (N) or payment period (M) is set to daily.

Example 1: A year has 366 days:
Compounding period (N) or payment period (M) is 366.

Example 2: A year has 365 days:
Compounding period (N) or payment period (M) is 365.

Example 3: A year has 364 days:
Compounding period (N) or payment period (M) is 364.

Example 4: A year has 360 days:
Compounding period (N) or payment period (M) is 360.