"Ordinary Interest" uses 360 as the number of days in a year when computing simple interest. (30 days per month X 12 months = 360 days)
Example: You borrow $100 from Jan 25 to Mar 11 at 7% interest
7 days in Jan + 30 days in Feb + 11 days in Mar = 48 days.
Interest = Principal x Rate x Time
Interest = 100 x .07 x 48 / 360
Interest = $0.93
Example: You borrow $100 from Jan 25 to Mar 11 at 7% interest
7 days in Jan + 30 days in Feb + 11 days in Mar = 48 days.
Interest = Principal x Rate x Time
Interest = 100 x .07 x 48 / 360
Interest = $0.93
