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## Costco Executive Membership, Part 2

Note: You can use any financial calculator to do this problem, but if you want the BEST, you can get our 10bii Financial Calculator for iOS, Android, Mac, and Windows!

THE SCENARIO A while back, I wrote about whether or not I should get a Costco Executive Membership. I eventually decided to do so, because I was planning to buy a computer during the next year, and those are pretty expensive so I figured it'd be a pretty sure thing that I'd make money on the deal. Now most of that year has elapsed, I haven't bought that computer, the check has arrived, and I want to know my ROI on the extra \$60 I paid for the Executive Membership. The check arrived after 10 months of purchases, and is in the amount of \$49.32. The Executive Membership cost me \$60 for the year, but today's purchases are accruing rebates for next year already for some reason, so buying a big-ticket item now doesn't change the math at all for this past (current) year. If I were to cancel the Executive Membership now, I'd get my \$60 back but I'd lose the \$49.32 check and also the rebates I'm currently accruing for purchases, even though those are going to be sent to me next year… as long as I maintain the Executive Membership for next year as well. I found this confusing, but evidently that's the way it is. The question: What's my ROI on the \$60 I paid?
THE SOLUTION First things first, make sure the calculator is using 12 Payments per Year. N: 10 (The check covers 10 months of purchases) I/YR: (This is what I'm trying to find) PV: -60 (The Executive Membership cost me \$60) PMT: 0 (During the 10 months, I did't get any checks and I didn't pay anything extra each month) FV: 49.32 (My rebate check is for \$49.32)

The Return on Investment on the \$60 I spent is -23.29%.

Obviously, this number doesn't make me jump for joy, but given that I've had to make an emergency computer purchase earlier this week (in addition to the planned computer purchase I'm going to make soon), I'm going to take the loss and go into the next year pretty confident that I'm going to come out ahead overall. Simple division reveals that I'm earning \$4.93 per month in rebates at my current spending level, and \$4.93 x 12 = \$59.18 is nearly the \$60 I paid. So my current level of spending has me nearly breaking even even without big-ticket purchases... of which there will be at least a couple on next year's check.

What do you think? Would you 'let it ride' for next year, or cancel now, get your \$60 back, and count yourself wiser for having given it a shot? Let us know in the comments!