How to use the accrued interest calculator
- Enter the principal and the annual interest rate.
- Enter the date interest starts and the date it runs through. The end date is not counted, as with most day count rules.
- Choose the day count convention your agreement uses: Actual/365, 30/360 bond basis or Actual/360.
- Read the accrued interest and the days counted. The table repeats the calculation under all three conventions so you can see how much the choice matters.
Formula
Accrued interest = principal x rate x days / year basis
Actual/365: days = actual days, basis = 365
Actual/360: days = actual days, basis = 360
30/360 bond basis: days = 360 x (y2 - y1) + 30 x (m2 - m1) + (d2 - d1), basis = 360
In 30/360 a start day of 31 is treated as 30, and an end day of 31 is treated as 30 only when the start day is 30 or 31. Other 30/360 variants handle the end of February differently.
$10,000 at 6% from January 1 to February 15
That period has 45 actual days. Under Actual/365 the accrued interest is $10,000 x 6% x 45 / 365 = $73.97. Under Actual/360 it is $10,000 x 6% x 45 / 360 = $75.00. Under 30/360 the days are 30 + 14 = 44, so interest is $10,000 x 6% x 44 / 360 = $73.33.
Month ends show the difference clearly. From January 31 to March 31, 30/360 counts exactly 60 days and accrues $100.00, while Actual/365 counts 59 days and accrues $96.99.
Why there are different conventions
Real months have different lengths, so lenders and bond markets agree on a rule for counting days. Some count the actual days and divide by 365 or 360. Others pretend every month has 30 days and every year 360 so that coupon periods come out evenly. The same dates and the same rate give slightly different interest under each rule.
The convention that applies is written in your loan agreement, note or bond terms. The tool lets you choose, and shows all three so you can see what a mismatch would cost.
Simple accrual and what is left out
This calculator computes simple interest over a single stretch of time, which is how accrued interest is usually shown on a bond purchase or an accounting entry. It does not compound, and it does not apply payments or fees that happen inside the period.
If interest is added to the balance as it builds, use the compound interest calculator. For the simple formula over whole years, see the simple interest calculator, and for yield on a bond the bond yield calculator.
Assumptions and limits
- The rate is an annual rate and interest does not compound within the period.
- The start date is counted and the end date is not.
- The 30/360 option follows the bond basis rule described above. End-of-February adjustments used by some other 30/360 variants are not applied.
- Amounts are rounded to the cent, half up.
Frequently asked questions
What is accrued interest?
It is interest that has built up since the last payment date but has not been paid yet. On a bond sold between coupon dates, the buyer typically pays the seller the accrued interest.
What does Actual/365 mean?
It counts the real number of calendar days in the period and divides by a 365-day year. Interest for 45 days at 6 percent on $10,000 is $10,000 x 0.06 x 45 / 365, or $73.97.
What does 30/360 mean?
It treats every month as 30 days and every year as 360 days, so the number of days between two dates follows a simple formula. It is common for corporate bonds and some loans.
Which day count convention should I choose?
Use the one named in your agreement or bond terms. If none is stated, ask the lender, because the choice changes the amount slightly and the difference grows with the principal and the length of the period.