章節 1  Introduction

For the purpose of calculating annual interest, it might seem reasonable to assume that a year contains 365 days. However, in practice, interest calculations don’t always assume that this is the case. A year for interest calculation purposes can contain 365,366, or even only 360 days. Moreover, individual months can contain more or fewer days than you might expect.

Depending on the day count basis on which interest is calculated, the amount of interest is different for the given principal amount, interest period, and interest rate. There are 2 types of day count basis - Money Markets basis and Bond basis.

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