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Welcome to the accounting departments, where everybody counts.

Kane, L. Business Insider (2014). 25 jokes that only accountants may find funny. Retrieved from https://www.businessinsider.com/jokes-for-accountants-2014-5 

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Compound Interest: Interest Conversion Function using BA II Plus calculator. (Source: Red River College tutoring).

When I was wondering how to use BA II Plus calculator to convert compounding interest rates between periods, I found this video clip. It is a good one as it shows detail steps of calculator’s keys to get the answers and illustrates the methodology. 

It might be useful for next mid-term exams, isn’t it?

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Day counting #3

In one of my Business Math session, I found a confusion over day counting for variable interest rate calculation. For a certain duration, the numbers of days is always one day more than those counted for interest rate calculation. The reason is that there is one day to have transactions completed. If the starting date is included in the duration, the ending date would be excluded or vice verse. 

For example, if I deposit money from Dec. 1, 2005 to Mar. 15, 2006, I have to give money to a bank on Dec. 1, 2005 and earn interest from that day, the ending date, Mar. 15, 2006 would be excluded from calculating the interest I have earned over the duration. The interest would be calculated over 104 days, not 105 days as the conventional count.

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Work-Life balance.

If anyone wants to find a place to smash stress after long hour studying, let’s join badminton games. I play once a week either in Thursday or Friday nights from around 7:00 to 9:00 in one of Mississauga Community centers. 

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Day counting #2

You will see how to count days in the duration between different months. For example, I am figuring out how many days between Dec.1, 2005 and Mar. 15, 2006. First, I am going to divide the duration into months, so then the duration will be the following:

Dec. 1 - Dec. 31, 2005

Jan. 1 - Jan. 31, 2006

Feb. 1 - Feb. 28, 2006

Mar. 1 - Mar. 15, 2006

The first three intervals are full months, so I know how many days in each interval. For the last interval, applying the rule plus 1 in the previous post, I know there are 15 days. So the answer is simply a total of 31,31,28 and 15, that is, 105 days. So easy !

Next is a confusion in day counting for variable interest rate calculation.

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Day counting #1

Day counting in Business Math

In the Business Math, you might see the duration, for example Dec. 01, 2005 and Mar. 01, 2006 and look up calendar to count days in that duration. There are many rules out there to reach the answer, but I just want to share my rule of thumb which you might find it useful.

For instance, how many days between Dec. 1, 2005 and Dec. 5, 2005 ? It is so easy to know that it is 5 days by counting your fingers on your hands. My rule is little different as I use this method: 5-1+1= 5. If the starting and ending date are in the same month, the number of days is determined by subtracting ending date from starting date and plus 1.

Apply this rule in another example, between Jan. 03 and Jan. 23. How many days are there? The answer is not 20 days, but 21 days (23-3+1).

Will you see that it is easy?

Next is day counting for the duration in different month.