Translating dates to times

Question

I am using Act/365 day-count convention. How do I compute the time offset between 2/28/2015 and 3/1/2016? 3/1/2017

Some ideas:

1. Direct day count: count number of days between the dates, and divide by 365. In my 2 examples, yields $1 \frac{2}{365}$ and $2 \frac{2}{365}$, respectively.
2. Add whole years, and only apply day count convention to the fraction of dates less than a year. Then we end up with $1 \frac{2}{365}$ and $2 \frac{1}{365}$.

Does anyone know which of the 2 approaches is correct? Thanks.

Answer 1

I am using Act/365 day-count convention. How do I compute the time offset between 2/28/2015 and 3/1/2016? 3/1/2017

So it is not clear whether you are referring to the Act/365F (Fixed) or the Act/365A (Actual). I think you are trying to us Act/365A as it is much more commonly used in the USA. Where as the Act/365F is more used in the UK from what I know.

If I am wrong and you are trying to use Act/365F then answer 1 is correct.

Under both Act/365A & Act/365F The numerator is the actual number of days in the accrual period.

Under Act/365A The denominator is 366 Feb 29 falls within the accrual period.

Thus:

• For 3/1/2016 the accrual would be 367/366
• For 3/1/2017 the accrual would be 732/366

Under Act/365F The denominator is always 365.

Thus:

• For 3/1/2016 the accrual would be 367/365
• For 3/1/2017 the accrual would be 732/365