Calvin,
IFAIK all banks assumes that the Year has 360 days & months have 30 days during the calculation of interest rate.

>The payment() function takes 3 parameters, 1. principal 2. interest rate expressed as an interest rate per period 3. The number of payments. Thereform. payment(1000,.12/12,12) is $88.85. I assume this function means that there are 12 equal periods in a year and thus a 360 day year. If I wanted to find out what the payment would be if the year were assumed to be 365 days would this form of the function call be correct : payment(1000,.12/12 * 365/360,12)?? This yields an answer of 88.93.