BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Ordinary simple interest is a simple interest that uses 360 days as the equivalent number of days in a year. On the other hand, Exact simple interest is a simple interest that uses exact number of days in a year which is 365 (or 366 for leap year).

Detailed explanation-2: -Ordinary interest is based on the assumption of thirty days in each month of the calendar year. This leads to a situation where the application of the interest rate is based on 360 days.

Detailed explanation-3: -Exact Interest-is computed in 365 days in a year as the time factor denominator. Ordinary Interest-is computed in 360 days in a year as the time factor denominator.

Detailed explanation-4: -The interest on most money market deposits and floating-rate notes is calculated on an actual/360-day basis.