[color=#0000ff][i]Capital [/i][/color](principal, pääoma) is the amount of money, for which the interest is paid for: a loan, a deposit, an investment or a mature bill.[br][br][color=#0000ff][i]Interest[/i][/color] (=korko) is either paid or received compensation of the loan money. It is given in currency. The [color=#0000ff][i]rate [/i] [/color]is the same in percentage.[br][br][color=#0000ff][i]Interest rate [/i][/color](=korkokanta) is the ratio of the interest per time. It is given in percentage and it is usually as annual interest.[br][br][color=#0000ff](Interest)[i] time[/i][/color] (=korkoaika) is the number of days between two dates for mature interest. The first date is not calculated to the interest time but the last date is. [br][br]

If interest rate is given as annual interest, then interest time must be given in years. There are three possible case for solving this:[br][br][list=1][*][b]real/360: [/b]There are 360 days in a year and the number of days is actual number of days. (ECB)[/*][*][b]real/365 (or 366): [/b]Actual number of days in a year and the number of days is actual number of days. (Typical in Finland for savings)[b][/b][/*][*][b]30/360[/b]: There are 30 days in a month and 360 in a year. The least used method but it is used for calculating residual tax. [b] [br][/b][/*][/list]There are no actual differences in the first two, as the method is paid attension when notifying the interest rate. Account and loan terms define which method is used.

A short-term credit was drawn January 20 and was paid at once the same year in March 15 (not a leap-year). What is the interest time in years in each cases.[br][br][table][tr][td][/td][td][b]1) real/360 [/b][/td][td][b]2) real/365 [/b][/td][td][b]3) 30/360 [/b][/td][/tr][tr][td]January[/td][td]31-20 =11[/td][td]31-20 =11[/td][td]30-20 =10[/td][/tr][tr][td]February[/td][td]28[/td][td]28[/td][td]30[/td][/tr][tr][td]March[/td][td]15[/td][td]15[/td][td]15[/td][/tr][br][tr][td]Total[/td][br][td]54[/td][br][td]54[/td][br][td]55[/td][/tr][br][tr][td]interest time [/td][br][td][math]\Large\frac{54}{360}[/math][/td][br][td][math]\Large\frac{54}{365}[/math][/td][br][td][math]\Large\frac{55}{360}[/math][/td][/tr][/table]