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A {{tag|day count fraction}}, actually<ref>See what I did there?</ref> is a [[deterministic]] means of calculating accrued [[interest]] for [[calculation period]]s shorter than a year. Different currencies and different interest rates have different conventions. The Numerator designates the number of days in the interest period in question; the denominator the number of days in the year. The {{tag|day count fraction}} can then be multiplied by the notional amount and the interest rate to get the dollar amount of interest due. | |||
Not to be confused with a [[Business day convention]], a travelling salesman's conference which usually takes place in Florida during the Hurricane Season.<br /> | Not to be confused with a [[Business day convention]], a travelling salesman's conference which usually takes place in Florida during the Hurricane Season.<br /> | ||
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*[[actual/365]]: the actual number of days in the period divided by the 365 (ie taking no account of leap years and other ad hoc modifications to the duration of a given year) | *[[actual/365]]: the actual number of days in the period divided by the 365 (ie taking no account of leap years and other ad hoc modifications to the duration of a given year) | ||
*[[30/360]]: Keen observers will note this fraction simplifies down to 1/12 - that is, a round month's worth of interest. Used mainly for fixed rates, where it doesn't really matter in which period a given day's worth of interest is paid, since it will be calculated exactly the same way anyway. | *[[30/360]]: Keen observers will note this fraction simplifies down to 1/12 - that is, a round month's worth of interest. Used mainly for fixed rates, where it doesn't really matter in which period a given day's worth of interest is paid, since it will be calculated exactly the same way anyway. | ||
{{daycountfractions}} | |||
<nowiki>*</nowiki>see what I did there? | <nowiki>*</nowiki>see what I did there? | ||
{{isia}} | {{isia}} {{c|Egg}} |