[Anonymous]

Becker Question –

This may be a silly question, but on F4-page 19 why do the use 360 days a year instead of 365 when figuring annual interest. Do we just use 360 when dealing with bank interest?

[Anonymous]

It's called the Banker's Rule. Most banks calculated based on 360, not 365.

[Hut-Hut]

It'd be more of a hassle to use 365. For calculation purposes, 360 days is a nice round number. They're going to assume it's 30 days a month for 12 months, giving you 360 days. When the question contains half a year, you would use 180 instead of half of 365. Much simpler. That's the logic behind it.

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[Author]

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