Is there a concise formula for calculating the remaining balance of a loan with actual/360 and actual/actual accruals?
I know for 30/360 amortizations, the remaining balance is just the FV of the principle less the FV of the loan payment annuity.
// Remaining balance for a loan amount of "princ" // and a monthly payment of "coupon" using a 30/360 accrual
Remaining Balance = princ * (1+r)^n - coupon * [((1+r)^n - 1) / r] I know with actuals, we can't easily use the annuity formula, since we don't have level payments.
I was hoping there was a formula that can take into account these "errors", where the annuity assumes 30 day, missing the day in 31, compound the error at the same rate, allowing us to still calculate the accurate remaining balance.
Or do we have to build a full amortization schedule to compute?
For a refresher on accrual methods, here is a terrific blog post explaining the differences