How to Use the Commercial Paper & RP Return Calculator
When you want to park cash for just a few weeks or months, commercial paper and repurchase agreements (repos) are common short-term, fixed-yield options often accessed through a brokerage sweep or money-market account. Enter your principal, the annual yield quoted on the note, the term in days, and your marginal tax rate, and this calculator shows pre-tax interest, tax owed, after-tax interest, and your total value at maturity.
Commercial paper is unsecured short-term debt issued by corporations to fund immediate operating needs, typically maturing in under 270 days, while a repo is a sale of securities (often Treasuries) with an agreement to buy them back at a set price and date — effectively a collateralized short-term loan. Neither is FDIC-insured like a bank deposit, but both offer a fixed, known yield and maturity, which is why they're popular for parking cash you'll need soon.
Interest from both is generally taxed as ordinary income at your federal marginal rate (and state rate, if applicable) rather than at preferential capital gains rates, which is why this calculator asks for your own tax rate instead of assuming one. Money-market conventions also typically use a 360-day year for these instruments, which this calculator follows — check your note's actual day-count convention if precision matters for your situation.
Frequently Asked Questions
Money-market instruments like commercial paper and repurchase agreements are conventionally quoted on an actual/360 day-count basis in the US, which is why this calculator uses 360 days rather than 365.
Both are generally taxed as ordinary interest income at your federal (and often state) marginal tax rate, unlike qualified dividends or long-term capital gains, which can receive preferential rates.