Joel R. Anderson

12 Jan 2000 

The Honorable Lawrence H. Summers
Secretary of the Treasury
Fifteenth St. and Pennsylvania Ave NW
Washington DC 20220

Dear Mr Secretary:

Re ERRORs in "Recent Treasury Bill Auction Results" reported on the department's website: www.publicdebt.treas.gov/servlet/OFBills Information provided by the Bureau of the Public Debt. Updated January 12, 2000

Prior to considering TreasuryDirect, I thought I would confirm my ability to duplicate Treasury rate calculations. Of 5 recent Treasury "discount" rates I checked, 2 were wrong.

DaTo		Pub'd	Calc'd	InvR
Mat	Price	360dis	360dis	tBas	Inv_Rate	365_APY	CUSIP	Comment
91	98.677	5.235	5.233846	366	5.392418	5.487211	912795DR9	Wrong
91	98.645	5.360	5.360439	366	5.524639	5.624532	912795DQ1
91	98.660	5.300	5.301098	366	5.462650	5.560135	912795DP3	Wrong
182	97.260	5.420	5.419780	366	5.665340	5.729886	912795ET4
364	94.292	5.645	5.645274	366	5.997369	6.070661	912795ES6	[1]

1. A weird formula is used to calculate the investment rate for bills of more than one half year to maturity:

Discount rate for bills of all maturities:
      Discount rate = (100-Price)/100 * (360/DaysToMaturity)

Since the published ''Investment'' rates for all 5 CUSIPs agree with my calculated ''Investment'' rates, I think the mistake is in the Treasury's published ''Discount'' rate.

Very truly yours, 

Joel R. Anderson

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