Sorry for the late hit but I got caught in the board’s outage.
I solved this iteratively using interest compounded daily. I used daily compounding because that would be the most likely way an alternative cash investment would be compounded (actually they may do continuous compounding these days). I think the 267% given earlier is based on semi-monthly compounding.
I get about 125.567% annualized rate. That’s still unbeatable. Your reasoning is correct regarding the timing. A dollar contributed the day before the stock purchase earns 15% in one day, which is annualized without compounding to 5,475%. Even a dollar contributed on the first day of the quarter earns 15% in a quarter, which is annualized without compounding to 45%.
There is no reason that anyone who works for your bank should pass this up. There is no better alternative investment.
My spreadsheet is posted at www.seigle.net/annualinterest.xls