Question 253. A demand note for $1,000 is dated August 1st, 1917, and bears interest at the rate of 8 per cent, per aunum. Our practice in computing the interest, and to this our customer agrees, is to add it at the end of each month. In this case for August we would calculate the interest on a basis of 30 days. If the note were paid on September 5th we would then add interest for five days. A customer argues that the interest should be computed for 31 days in August and only four in September. What is the usual procedure adopted by banks in calculating interest on notes of this kind?

Answer. - The usual procedure is to exclude the first and include the last day. In the case cited interest should be charged for 30 days in August and five days in Septcmber, 35 days in all.