How to Use DAYS360 Function in Excel – Examples

Excel’s DAYS360 function determines the difference in days among both two dates using a 360-day year with 30 days in each month. This function is commonly used in financial and accounting applications, such as calculating loan or investment interest.

Syntax of DAYS360 Function

=DAYS360(start_date, end_date, method)

The argument of DAYS360 Function

start_date: The calculation begins on this date. You can either enter the date directly as a string in the format “mm/dd/yyyy” or refer to a cell that contains a date value.

end_date: This is the calculation’s end date. You can enter the date directly, as with the start date argument, or reference a cell that contains a date value.

method (optional): This argument specifies how the number of days between the two dates should be calculated. It’s an optional argument, and if you leave it blank, Excel will assume you’re using the US method.

• FALSE, 0, or omitted(The US method): This assumes that each month has 30 days and that there are 360 days in a year.
• 1 or TRUE( The European method): This assumes that each year has 360 days, but computes the number of days between the dates using the actual number of days in each month.
• 2 (The actual method) This calculates the number of days between the dates based on the actual number of days in each month and takes leap years into account.

Note: The method argument has no effect on the actual dates, only on the calculation of the number of days between them.

Return of DAYS360 Functions

The DAYS360 function will return the total number of days between the two dates over the course of a 360-day year.

Example #1: Basic Application of DAYS360 Function

If you want to calculate the number of days between the beginning and end of the month, use the DAYS360 function as shown below.

=DAYS360(B3,C3)

In the example above, the method was not assigned in the DAYS360 function. That’s why Days360 used the US method by default.

Difference between US Method and European Method

• The US method is based on the assumption that each month has 30 days. This means that the number of days between two dates is determined by multiplying the number of whole months by 30, then adding any remaining days. 
• The European method assumes that beginning and ending dates that fall on the 31st of a month are equal to the 30th of the same month. 

So in the example above, using the US method, one month’s span counts as 30 days in general.

But in the EU method, the end date shifted to the 30th date, so the return is 30-1 =29

The Number of Days Between Two Dates is Calculated by DAYS360 Using This Method as Follows:

• If the start date is the 31st of the month, it is moved to the 30th.
• If the end date is on the 31st of the month and the start date is on or before the 30th, the end date is moved to the 1st of the following month.
• If the end date is the 31st of the month and the start date is after the 30th, the end date is shifted to the 30th.
• If either the start or end date is on the 31st of the month, it is moved to the 30th.

Things to Keep in Mind about DAYS360 Function

• #VALUE! error: If either date1 or date2 arguments are not valid Excel date values, or if either argument contains text that cannot be recognized as a date, this error occurs.
• The #NUM! error occurs when the start date is after the end date.
• #NAME? error: This error occurs when Excel does not recognize the DAYS360 function. This could be due to a typo in the function name or because the function is not available in your Excel version.

Aside from these errors, it’s important to remember that the DAYS360 function makes assumptions about the number of days in each month that may not be appropriate for all financial calculations. As a result, depending on the specific needs of your calculation, it is critical to select the appropriate method for calculating the number of days between two dates.

Why DAYS360? Why not 365?

The assumption of a 360-day year stems from the fact that many financial markets, particularly in Europe, have historically used a 360-day year to calculate interest rates. The 360-day year was seen as a simplification of the actual length of a year, which is 365 days.

Why the Function DAYS360(date1,date2) is Calculating 30 Days for February

When using the DAYS360 function in Excel, regardless of the actual number of days in the month, the assumption is that each month has 30 days. This is commonly referred to as the “30/360 method.“

So, in the case of February, which has fewer than thirty days, the DAYS360 function calculates as if it has thirty days.

Difference Between DAYS and DAYS360 in Excel

The DAYS and DAYS360 functions in Excel differ in that the DAYS function calculates the actual number of days between two dates, whereas the DAYS360 function assumes that each month has 30 days and calculates the number of days based on that assumption.