A financial tool, often implemented in spreadsheet software, facilitates the computation of loan repayment schedules. It employs either a 365-day or 360-day year convention to calculate daily interest accrual. For instance, such a tool might determine the monthly payment required to amortize a loan of $10,000 over five years at an interest rate of 6%, while adhering to either the 365-day or 360-day interest calculation method.
This type of tool provides transparency and accuracy in loan management. Its usefulness stems from its capacity to assist borrowers and lenders in understanding the true cost of borrowing, enabling informed financial decisions. Historical context reveals that such utilities evolved from manual calculations to digital implementations, reflecting advancements in computational power and financial modeling.