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Posted by joeu2004 on March 5, 2006, 6:54 pm
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Jeff Strickland wrote:
> Another thing to remember is that a month is always 30 days,
> and a year is always 360 days. They might be compounding
> daily by using the Average Daily Balance method.
Is 30/360 standard in the US lending industry? Is it required by
US law?
I thought lenders use 365 nowadays, and I ass-u-me-d they
would use 365/12 for days per month. But I confess: I do not
know where I got that idea.
(I know that 30/360 was common "in the old days" when
computation was difficult.)
Anyway, the thought that perhaps they compute a daily IRR
seems plausible. Sigh, if I had a decent programming environment,
I could resolve this quickly. It will be a struggle for me to do
this in my current situation. Thanks for the thought.
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