▁factor : ▁▁▁▁ ▁However , ▁when ▁operating ▁in ▁a ▁bank , ▁where ▁the ▁amount ▁the ▁bank ▁can ▁l end ▁( and ▁therefore ▁get ▁interest ) ▁is ▁linked ▁to ▁the ▁value ▁of ▁its ▁assets ▁( including ▁acc ru ed ▁interest ), ▁trad ers ▁usually ▁use ▁daily ▁comp ounding ▁to ▁disc ount ▁c ash ▁flows . ▁Indeed , ▁even ▁if ▁the ▁interest ▁of ▁the ▁b onds ▁it ▁holds ▁( for ▁example ) ▁is ▁paid ▁semi - ann ually , ▁the ▁value ▁of ▁its ▁book ▁of ▁bond ▁will ▁increase ▁daily , ▁thanks ▁to ▁acc ru ed ▁interest ▁being ▁account ed ▁for , ▁and ▁therefore ▁the ▁bank ▁will ▁be ▁able ▁to ▁re - in vest ▁these ▁daily ▁acc ru ed ▁interest ▁( by ▁l ending ▁additional ▁money ▁or ▁bu ying ▁more ▁financial ▁products ). ▁In ▁that ▁case , ▁the ▁disc ount ▁factor ▁is ▁then ▁( if ▁the ▁usual ▁money ▁market ▁day ▁count ▁convention ▁for ▁the ▁currency ▁is ▁A CT / 3 6 0 , ▁in ▁case ▁of ▁curr encies ▁such ▁as ▁United ▁States ▁doll ar , ▁euro , ▁Japanese ▁y en ), ▁with ▁r ▁the ▁zero - rate ▁and ▁T ▁the ▁time ▁to ▁c ash ▁flow ▁in ▁years : ▁▁▁▁ ▁or , ▁in ▁case ▁the ▁market ▁convention ▁for ▁the ▁currency ▁being ▁disc ount ed ▁is ▁A CT / 3 6 5 ▁( A UD , ▁C AD , ▁GB P ): ▁▁▁▁ ▁Sometimes , ▁for ▁manual ▁calculation , ▁the ▁continu ously - comp ounded ▁hypothesis ▁is ▁a ▁close - en ough ▁approximation ▁of ▁the ▁daily - comp