my typical interest calculation is Actual/Actual or Actual/365. I'm curious to how 30/360 should be calculated if the duration is not from beginning of the month to the end of the month.
Disbursal January 15 2015 Initial Payment February 15 2015. Principal $10,000 Interest 8.5% Compounded semi annually
Typically my calculation would be to find effective monthly rate then find the effective daily rate.
InterestAccrued = (((1 + 0.085/2)^2 )^ (31/365) - 1 ) * 10000
In this case I know intuitively that I can use the below to calculate interest accrued
InterestAccrued = (((1 + 0.085/2)^2 )^ (30/360) - 1 ) * 10000
But that's I want to programatically figure out the days passed. For example if the initial payment was February 14, 2015. What should the InterestAccrued be?
What I'm leaning towards is as follow, calculate days passed in 30/360 ratio. To February 14, 30 days has passed. So in terms of 30/30, the total days passed is below
DaysPassed/360 = (30/365) DaysPassed = 29.5890411 InterestAccrued = (((1 + 0.085/2)^2 )^ (29.5890411/360) - 1 ) * 10000