# of days b/t dates/ # of days in reference period * interest earned in reference period

For example: Suppose that the bond principal is $100, coupon payment dates are 3/1 and 9/1, and the coupon rate is 8%. We wish to calculate the interest earned between 3/1 and 7/3.

(Actual / Actual) = (124 / 184)*$4 = $2.6957

(30 / 360) = ((4*30+2)/180)*$4 = $2.7111

(Actual/360)= (124/180)*4= $2.7556

How did we get these numbers?