How this calculator works
Actual calendar days are divided by the chosen contractual year length. The debit balance and annual rate remain constant, and interest does not capitalize during the interval. Many brokers use a 360-day basis, but the agreement controls. For changing balances or rates, calculate each segment and add its interest.
Formula
I = B × r × d/D, where B is debit balance, r annual fractional rate, d actual days and D either 360 or 365.
Worked example
$10,000 borrowed at 12% for 30 days costs $100 under Actual/360. Under Actual/365 Fixed, $7,300 at 5% for 20 days costs $20.
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Frequently asked questions
Are weekends counted?
Yes. This model uses actual calendar days rather than trading days.
Does interest itself earn interest?
No during the modelled interval. A broker may capitalize unpaid charges at billing, requiring a new balance for the next interval.
Why can the day-count choice change the result?
The same annual quote divided by 360 creates a larger daily charge than division by 365.