When creating a distribution plan, one of the required entries for some Hurdle Types is "day count convention." A day count convention determines how interest accrues over time for an investment.
Actual/Actual - calculates the daily interest using the actual number of days in the year and then multiplies that by the actual number of days in each time period.
This will result in payments that vary from month-to-month and also factor in the extra day of a leap year.
Actual/365 - calculates the daily interest using a 365-day year and then multiplies that by the actual number of days in each time period.
This will result in payments that vary from month-to-month, but does not factor in a leap year.
Actual/360 - calculates the daily interest using a 360-day year and then multiplies that by the actual number of days in each time period.
This will result in payments that vary from month-to-month, but does not factor in a leap year.
30/360 - calculates the daily interest using a 360-day year and then multiplies by the days elapsed in the time period, but treating every month as a standardized 30-day month.
As long as distributions are entered on the same day of the month, this will result in payments that are equal month-to-month.
30E/360 - calculates the daily interest using a 360-day year and then multiplies by the days elapsed in the time period, but treating every month as a standardized 30-day month, with the exception that February is not treated specially.
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