No. of Recommendations: 1
I agree with Mark that there can be complications, but the basic formula for 'tax equivalent yield' is:
yield / (1 - exempted tax rate)

In the case of T-Bills, we'd be talking about state taxes.

Here in Mass we have a relatively simple, 5.3% flat state tax rate, or 0.053.

So for a 5% T-Bill, to use round numbers, we're looking at:
5 / (1 - 0.053) = 5 / .947 = 5.28%
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.