The US government sells 2 types of savings bonds. One is called a series EE...
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The US government sells 2 types of savings bonds. One is called a series EE bond and has a fixed rate. The other is called an I bond - the I stands for inflation - and the rate adjusts based on inflation. These are both zero-coupon bonds and are different from other bonds because they do not have a "face value"/"par value". This is because investors can purchase the bonds for any amount between $25 and $10,000 so the redemption value (future value) of the bond depends on the dollar amount invested and the interest rate. Interest on these bonds compounds semi-annually. (More information on US Savings bonds)
Suppose that you invest $500 in a Series EE bond with a yield to maturity of 2.71%. What will be the bond's value in 9 years?
The US government sells 2 types of savings bonds. One is called a series EE bond and has a fixed rate. The other is called an I bond - the I stands for inflation - and the rate adjusts based on inflation. These are both zero-coupon bonds and are different from other bonds because they do not have a "face value"/"par value". This is because investors can purchase the bonds for any amount between $25 and $10,000 so the redemption value (future value) of the bond depends on the dollar amount invested and the interest rate. Interest on these bonds compounds semi-annually. (More information on US Savings bonds)
Suppose that you invest $500 in a Series EE bond with a yield to maturity of 2.71%. What will be the bond's value in 9 years?
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