Exact interest

Definition:

Interest paid based on the basis of a 365-day/year schedule by a bank or other financial-institution as opposed to a 360-day basis (ordinary interest). Difference can be material when large principal sums of money are involved.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Credit quality

A measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA, and so forth. The lower the rating, the higher the... Read More

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