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APR During a Leap Year

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How can I validate that the APR I have disclosed is correct during a leap year? I noticed that if I enter the loan date as 02/28/19 and the first due date as 03/28/19, APRwin returns that there is 1 period and 0 odd days which matches what our internal software has calculated. If I enter the loan date as 02/29/20 and the first due date as 03/29/20, it returns 0 periods and 28 odd days. This definitely doesn't match our internal software as it also returns 1 period and 0 odd days for this scenario. I've read online that APRwin has limitations for calculations when the year has 366 days. Should we go with 1 and 0 and is there another tool we can use to confirm this?

Go with 1 and 0. That's what Appendix J says you have and Appendix J is the legal standard.

From Appendix J:
"Full months shall be measured from any point in time on a given date of a given month to the same point in time on the same date of another month....If the unit period is a month, the number of full unit periods between two dates shall be the number of months measured back from the later date."

Counting backwards from 3/29/20 to 2/29/20, you get one full month.

"The remaining fraction of a unit period shall be the number of days measured forward from the earlier date to the beginning of the first full unit period, divided by 30."

Counting forward from 3/29/20 to 3/29/20, you get 0 odd days.

First published on 12/29/2019

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