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

Student Co-author

CGU Graduate

Document Type



Engineering (HMC)

Publication Date



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.

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© 1979 Taylor and Francis

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