MATH & FORMULAS
Actual/360 vs Actual/365 Interest Formula
Compare Actual/360 and Actual/365 interest calculations, with a worked example, day-count explanation, and an online daily interest calculator.
Actual/360 versus Actual/365: the formulas
For a fixed principal and simple interest, interest for a given number of actual calendar days is:
Actual/360 divides the annual rate by 360. Actual/365 divides by 365. Both count the real number of days elapsed; the divisor is what differs.
Example: $50,000 at 8% for 30 days
| Convention | Calculation | Interest |
|---|---|---|
| Actual/365 | $50,000 × 0.08 × 30 ÷ 365 | $328.77 |
| Actual/360 | $50,000 × 0.08 × 30 ÷ 360 | $333.33 |
The Actual/360 example charges $4.56 more over these 30 days. Over an entire year, the difference depends on the timing of balances and payments.
Which day-count basis applies to your loan?
Use the convention specified in your note or loan agreement. Bank loans, mortgages, and private notes can use different conventions, and some use 30/360 rather than Actual/360. A simple division by 360 is not the same thing as a 30/360 day-count convention.
Calculate with your own dates
Use the free Daily Interest & Per Diem Calculator to compare 360 and 365 conventions, or prepare a Loan Payment History Statement for fixed-rate simple-interest payments.
Why Actual/360 produces more interest
With the same actual elapsed days and annual nominal rate, dividing by 360 produces a larger daily interest accrual than dividing by 365. On a $50,000 principal at 8% for 30 days, Actual/360 is $333.33 and Actual/365 is $328.77—a difference of $4.56 after rounding to cents separately.
Use the Daily Interest Calculator to compare day-count methods using your own dates, and see the payoff statement template for a practical document example. Always check which basis your loan contract specifies.