How to use the DAYS360 function in Excel

The DAYS360 is use to calculates the number of days between two dates based on a 360-day year (12 months × 30 days each), commonly used in financial and accounting calculations.

Syntax

DAYS360(start_date, end_date, [method])

Arguments

• start_date (required): The beginning date of the period.
• end_date (required): The ending date of the period.
• method (optional): Specifies the calculation method:
  • FALSE or omitted: U.S. (NASD) method
    • If the start date is the last day of a month, it is treated as the 30th of the same month.
    • If the end date is the last day of a month:
      • If the start date is before the 30th, the end date becomes the 1st of the next month.
      • Otherwise, the end date becomes the 30th of the same month.
  • TRUE: European method
    • Any 31st of a month is treated as the 30th of the same month.

Background

• Primarily used for interest calculations in financial applications (e.g., bonds, loans).
• Returns a negative number if start_date > end_date.
• Always use the Excel percent format for interest rates (e.g., 5.25%).

Interest Calculation Formula

To compute interest over a period:

Interest = Capital × Interest Rate × DAYS360(start_date, end_date, [method]) / 360

Use ROUND() to format the result to 2 decimal places (currency format).

Example

Calculate interest for $250,000 at 5.25% from November 22, 2010 (cell C12) to May 31, 2011 (cell E12):

1. Calculate Days (European method):

=DAYS360(C12, E12, TRUE) 

Returns: 188 days.

1. Compute Interest:

=C11 * E11 * DAYS360(C12, E12, TRUE) / 360 

Returns: $6,854.17.

Key Notes

• Error Handling: Ensure dates are valid (use IFERROR for robustness).
• Method Selection: Choose TRUE (European) or FALSE (U.S.) based on financial standards.