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Thread: Miles for Large Bank Balances
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Old May 25, 2010 | 8:03 pm
  #81  
ffI
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Originally Posted by uiucsb
Summary:
RoR: (value of miles)(0.1)(12)+(TaxRate-1)(Missed savings rate - BD savings rate)
cpm: (Missed savings rate - BD savings rate) / (0.1)(12)
(including taxes would decrease the cpm)
Hope this helps someone.
Man and I thought I was bad!
To simplify, at a conservative 1 cpm value, 45% tax rate and 2% 2 yr CD savings rate and 0%BD

RoR= 1c x 1.2 + -0.55x2 = 1.2c-1.1c= 0.1c/yr/$ invested
But this is incremental RoR compared to simple cash RoR, I think.

cpm here is wrong; as it fails to take aftertax costs into account
It should be (2%-0)x(1-45% tax) = 1.1c /1.2miles = 0.92 cpm / $ invested = a very good value!
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