1. What is the I Bond Future Value Calculator?

The I Bond Future Value Calculator estimates the future value of Series I savings bonds based on purchase amount, projected composite rate, and investment period. I bonds are U.S. Treasury savings bonds that earn interest based on both fixed and inflation rates.

2. How Does the Calculator Work?

The calculator uses the I bond future value formula:

Where:

• \( P \) — Purchase amount (USD)
• \( projected\_composite \) — Projected composite rate (decimal)
• \( future\_y \) — Future years (years)

Explanation: The formula accounts for semi-annual compounding of the composite interest rate over the specified investment period.

3. Importance of I Bond Future Value Calculation

Details: Calculating future value helps investors understand the potential growth of their I bond investments, plan for long-term savings goals, and compare I bonds with other investment options.

4. Using the Calculator

Tips: Enter purchase amount in USD, projected composite rate as a decimal (e.g., 0.05 for 5%), and future years. All values must be valid (purchase amount > 0, composite rate ≥ 0, future years > 0).

5. Frequently Asked Questions (FAQ)

Q1: What are I bonds?
A: I bonds are U.S. Treasury savings bonds that protect against inflation. They earn a combination of fixed rate and inflation rate.

Q2: How is the composite rate determined?
A: Composite rate = fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate).

Q3: What is the minimum investment in I bonds?
A: Minimum electronic purchase is $25, minimum paper bond purchase is $50.

Q4: Are there holding period restrictions?
A: I bonds must be held for at least 1 year. Redeeming within 5 years forfeits the last 3 months of interest.

Q5: How accurate are these projections?
A: Projections are estimates based on current rates. Actual returns may vary due to changes in inflation rates.