Case Study: An Economic Analysis of S and L Savings Certificates and Treasury-Bill Accounts

Authors

Brian Almond, Claremont Graduate University
Donald S. Remer, Harvey Mudd CollegeFollow

Student Co-author

CGU Graduate

Document Type

Article

Department

Engineering (HMC)

Publication Date

1979

Abstract

Owners of time certificates (TC's) issued by savings and loan associations occasionally are faced with deciding whether to cash in part or all of their certificates before maturity or borrow against them when an alternate investment becomes available. This paper presents a mathematical model for an economic comparison of these alternatives. The majority of TC's are either savings certificates (SC's) or Treasury-Bill accounts. Results have been compiled for the most common types of SC's available at S&Ls (refer to Table I). In addition, results are included for Treasury-Bill accounts. The economic analysis presents equations to help the reader make a comparison of alternatives based on their future values. Four examples are presented to illustrate the application of this model in various situations.

Rights Information

© 1979 Taylor and Francis

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

DOI

10.1080/00137917908902852

Recommended Citation

Almond, B., and Remer, D. S., "Case Study: An Economic Analysis of S & L Savings Certificates and Treasury Bill Accounts," The Engineering Economist, 25, 209 (1980). doi: 10.1080/00137917908902852