N.Y. Comp. Codes R. & Regs. tit. 9 § 1644-2.2
Interest on local agency temporary indebtedness, whether to the State, as evidenced by certificates of indebtedness, or to private investors, as evidenced by temporary loan notes, is computed on the basis of a 360-day year, with each month considered as having 30 days. The date of issue, or effective date of issue, of the evidence of indebtedness is included, but not the date of maturity. The computation of interest on temporary indebtedness is illustrated in the following example, where it is assumed that a temporary loan note for $100,000 is dated January 28, 1947, matures on April 15, 1947 and bears an interest rate of 80 per cent per annum. The computation would be equally valid where the local agency had issued its certificate of indebtedness for an advance by the State representing the proceeds of an issue of short-term notes by the State.
Using the above conventions, determine the life of the note, in days, as follows:
| Month | No. of days |
| January (1/28, 1/29 and 1/30) | 3 |
| February | 30 |
| March | 30 |
| April | 14 |
| Total | 77 |
Note that, in arriving at the number of days, January 31 has not been counted and that each full calendar month between the issue and maturity dates is counted as 30 days, regardless of the actual number of days in the respective months. This results from the application of the convention for the 30-day month. Special cases may arise where the date of issue or maturity is the 31st day of a month. These are handled by counting the 31st day as one day, if the issue date is the 31st day of the month, and by counting the month as 30 days, if the maturity date is the 31st day of the month.
Determine the daily rate of interest, in dollars, by multiplying the principal amount of the note by the interest rate and dividing the product by 360 days:
| $100,000 * 80%/360 | = | $2.222222 |
The quotient is carried out to six decimal places, and reduced to five decimal places. If the sixth decimal is four or less, it is dropped and the fifth decimal retained unchanged, but if the sixth decimal is five or more, the fifth decimal is increased by one when the sixth decimal is dropped.
Determine the amount of interest to be accrued at the end of each quarter in accordance with the illustration which follows:
| Month | No. of days | Daily interest rate | Interest to be accrued |
| January (1/28, 1/29, 1/30) | 3 | 2.22222 | $ 6.67 |
| February | 30 | 2.22222 | 66.67 |
| March | 30 | 2.22222 | 66.67 |
| Totals | 63 | $140.01 |
When a full quarter is involved, the quarterly accrual is obtained by multiplying the monthly interest ($66.67) by the number of months (three) or $200. The total interest accrued can be checked by multiplying the aggregate life of the note, in days, by the daily interest rate and adjusting the interest for the final month for any possible difference, which should, at most, be not more than a few cents.
N.Y. Comp. Codes R. & Regs. Tit. 9 § 1644-2.2