Lesson 8 of 25 · 6 min
What an interest leg is
A leg is one stretch of days at one rate on one balance, and March has two of them.
An interest leg is one segment in which balance, stated rate, and day-count convention are all constant. The charge for that segment is a single multiplication. When any of those three inputs changes, the period splits and a new leg begins. March on this page splits once, on the 12 March reset, so the statement prints two legs.
Leg 1 runs 1–11 March: eleven days, opening drawn balance $1,847,220.00, stated rate 6.97%, Act/360. The arithmetic is $1,847,220 × 0.0697 × 11 ÷ 360 = $3,934.07. Leg 2 runs 12–31 March: twenty days, same balance, stated rate 7.22%. The arithmetic is $1,847,220 × 0.0722 × 20 ÷ 360 = $7,409.40. The printed total, $11,343.47, is those two products added. Draws and repayments are $0.00, so no third leg exists for a balance change.
A leg is not a day and not a month. A 31-day month with one reset and a flat balance is two legs. The same month with a mid-period draw would be three. A month with a daily-resetting index and no grouping would be as many legs as there are distinct rates. The statement's interest block is a list of legs, even when a less complete page collapses them into one line called “interest charged”.
Track 5 lesson 15 is the general reconstruction: segment until both balance and rate are constant, multiply, add. This lesson is the same procedure on the fixture. The two printed legs already are the segments. Reproducing them is the check that the rate schedule, the day count, and the opening balance are the inputs the ledger used.
Key terms
- Interest leg
- One stretch of days during which balance, stated rate, and day-count convention do not change. Its charge is one multiplication.
- Segment
- The same idea under the reconstruction name from Track 5. A period is a sequence of segments; each segment is a leg.
- Reset
- The date a new stated rate begins. On this page, 12 March 2026, which is why March is two legs rather than one.
Worked example
Two multiplications, one total
Facility HW-SB-44107, March 2026. Balance flat. One reset. Act/360.
- Leg 1 window
- 1–11 March, 11 days, 6.97%
- Leg 1 charge
- $1,847,220 × 0.0697 × 11 ÷ 360 = $3,934.07
- Leg 2 window
- 12–31 March, 20 days, 7.22%
- Leg 2 charge
- $1,847,220 × 0.0722 × 20 ÷ 360 = $7,409.40
- Sum of legs
- $3,934.07 + $7,409.40 = $11,343.47
- Printed interest charged
- $11,343.47
The month is not one rate times 31 days. It is two legs. The total is an addition, not a blended-rate claim.
Check yourself
Rebuild March as a single 31-day leg at the closing stated rate of 7.22% on $1,847,220, Act/360. What figure do you get, and what is the gap to the printed $11,343.47?
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Educational only. Nothing in this lesson is investment, legal or tax advice, or a recommendation to enter into any transaction. Figures are illustrative and computed from the inputs stated in the lesson.