Author Topic: Figuring Out the Math  (Read 7083 times)

Offline srap

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Figuring Out the Math
« on: June 01, 2014, 10:32:45 PM »
With each opportunity we need to figure out the math to see if it is worthwhile for us or not.  How many times do you just not get it, but were afraid to ask?  Possibly you asked and still didn't get it? 


This thread is dedicated to ANY math/calculation that we do not understand.  This is only for explaining the math, not the concepts behind the choices.  One example that comes to mind would be how to calculate cent per point/mile.  Anyone care to explain that?


Following is another example:
$200.00 + $6.95 = $206.95
$206.95 * .01 = 2.07
$6.95 - $2.07 = $4.88

$4.95 at CVS would still be $4.95 as they are not a part of the Visa Savings Edge program.
There are many ways to skin a cat.  Some ways are just less profitable than others.  ....

Offline EJB

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Re: Figuring Out the Math
« Reply #1 on: June 01, 2014, 11:09:40 PM »
The multiplication? Subtraction? Or string theory calculations?

Offline David R

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Re: Figuring Out the Math
« Reply #2 on: June 01, 2014, 11:33:20 PM »
With each opportunity we need to figure out the math to see if it is worthwhile for us or not.  How many times do you just not get it, but were afraid to ask?  Possibly you asked and still didn't get it? 


This thread is dedicated to ANY math/calculation that we do not understand.  This is only for explaining the math, not the concepts behind the choices.  One example that comes to mind would be how to calculate cent per point/mile.  Anyone care to explain that?


Following is another example:

Using your ink Visa card to buy a $200 gift card at Staples:
206.95 X 5 = You earn 1035 points
After the Visa Savings Edge rebate, you spent $4.88 in fees to get those 1035 points.
488 cents / 1035 points = 0.47149758454106280193236714975845 cents per point.

Using your Freedom card to buy a $500 One Vanilla card at CVS if you have a Chase checking account:
504.95 X 1.1 = You earn 556 points
You spent $4.95 in fees to get those 556 points.
495 cents / 556 points = 0.8902877697841726618705035971223 cents per point.

Offline srap

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Re: Figuring Out the Math
« Reply #3 on: June 02, 2014, 12:30:47 AM »
Or without a Chase account it would only be $504.95 x1 so it would cost 98 cents to get each point.
THANK YOU, you made it clear as a bell.

I hadn't spent the time to sit down and think it out...too involved in just trying to get involved in the CCs.
I also haven't sat down to figure out how to calculate how much each point is worth to sell.  I am not into selling, but that is the value that people seem to attribute to points. 

I have heard:  "Foolish to waste points on buying things," "Worth more to use for miles," and "I just use Dan's figures.  I have no idea how he figures it out."


May we continue with the steps for "Chase Sapphire is 2.14 UR points per dollar where United earns 1.5 miles per dollar?" 

Offline george

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Re: Figuring Out the Math
« Reply #4 on: June 02, 2014, 01:14:50 AM »
 
May we continue with the steps for "Chase Sapphire is 2.14 UR points per dollar where United earns 1.5 miles per dollar?"
When purchasing most anything travel related (flights, hotels, cars, tolls, etc.), or when paying at a restaurant, the SP card gives you 2X points, plus there's the 7% annual dividend. That amounts to 2.14 points per dollar of travel spending.
The United Club card, in contrast, would give you 1.5 United miles per dollar spent.

Offline ckmk47

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Re: Figuring Out the Math
« Reply #5 on: June 02, 2014, 01:40:07 AM »
Or without a Chase account it would only be $504.95 x1 so it would cost 98 cents to get each point.

that's .98 cpp (cents per point)  that is less than a cent.

Offline george

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Re: Figuring Out the Math
« Reply #6 on: June 02, 2014, 01:51:39 AM »
that's .98 cpp (cents per point)  that is less than a cent.
True, good catch.

Offline srap

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Re: Figuring Out the Math
« Reply #7 on: June 02, 2014, 01:54:09 AM »
When purchasing most anything travel related (flights, hotels, cars, tolls, etc.), or when paying at a restaurant, the SP card gives you 2X points, plus there's the 7% annual dividend. That amounts to 2.14 points per dollar of travel spending.
The United Club card, in contrast, would give you 1.5 United miles per dollar spent.
This is what I want to show to those for whom it's confusing.
1 point per dollar is 1x.
SPG gives 2.0 points per dollar or 2x plus 7% bonus (=.07)/yr. 
7% of 2.0 = .14 so SPG gives 2.0+.14=2.14 points per dollar.


Obvious to most of you, but I assure you not to all.
« Last Edit: June 02, 2014, 01:58:29 AM by srap »

Offline srap

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Re: Figuring Out the Math
« Reply #8 on: June 02, 2014, 01:55:31 AM »
that's .98 cpp (cents per point)  that is less than a cent.
Yup!  Omitted the decimal.  Thanks for catching it.

Offline notanonymous

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Re: Figuring Out the Math
« Reply #9 on: June 02, 2014, 01:58:49 AM »
This is what I want to show to those for whom it's confusing.
1 point per dollar is 1x.
SP gives 2.0 points per dollar or 2x plus 7% bonus (=.07)/yr. 
7% of 2.0 = .14 so SP gives 2.0+.14=2.14 points per dollar.


Obvious to most of you, but I promise you not all.
ftfy

I'm sure it was a typo, but I don't want someone else reading this to make a mistake.

Offline srap

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Re: Figuring Out the Math
« Reply #10 on: June 02, 2014, 02:01:27 AM »
ftfy

I'm sure it was a typo, but I don't want someone else reading this to make a mistake.
:-[  It's called "late hour and not rereading my posts before posting."  TY.
I had better stop while I am not ahead!


I hope people continue to use this venue to help them fully understand the numbers behind why we do what.
Thanks guys!
« Last Edit: June 02, 2014, 02:04:52 AM by srap »

Offline ckmk47

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Re: Figuring Out the Math
« Reply #11 on: July 21, 2014, 11:25:23 PM »
A simple math setup for those who really skipped math in HS.

If someone is paying 1 cent a point and you're selling 5,000 points:

.01 x 5000 = $50

when you're using 1.5 cpp, you mean .015   (that's 1 and a half cents per point)
.015 x 5000 = $75

Offline SamKey

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Re: Figuring Out the Math
« Reply #12 on: July 22, 2014, 05:44:12 AM »
A simple math setup for those who really skipped math in HS.

If someone is paying 1 cent a point and you're selling 5,000 points:

.01 x 5000 = $50

when you're using 1.5 cpp, you mean .015   (that's 1 and a half cents per point)
.015 x 5000 = $75

Offline ChaimMoskowitz

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Re: Figuring Out the Math
« Reply #13 on: July 24, 2014, 06:16:08 PM »
i need hyatt points.

1 - i can buy Staples 200 GC's with IP/IB at 5x.

2 - i can also buy 500 GC's at 5% cash back.

would it be better with option 1 (transfer UR to Hyatt) or option two (purchase Hyatt points with the cash back)?
I just found a new supply of forks!

Offline srap

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Re: Figuring Out the Math
« Reply #14 on: July 24, 2014, 06:44:18 PM »
i need hyatt points.

1 - i can buy Staples 200 GC's with IP/IB at 5x.
2 - i can also buy 500 GC's at 5% cash back.

would it be better with option 1 (transfer UR to Hyatt) or option two (purchase Hyatt points with the cash back)?
I don't know the answer to this, but these are the exact kinds of questions for which I want to read what people write and see the math!