When the due date of a note is stated in months the time factor in computing interest is the number of months divided by 360 days.

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When the due date of a note is stated in months, the time factor in computing interest is typically the number of months divided by 12, as interest calculations are usually based on a 360-day year or a 365-day year, depending on the specific terms, but months are divided by 12 to convert to years, not by 360 days.

When the Due Date of a Note Is Stated in Months