1. What is the US Treasury EE Savings Bond Formula?

The US Treasury EE Savings Bond formula calculates the current value of EE savings bonds based on the purchase amount, annual interest rate, and years held. EE bonds are low-risk savings instruments issued by the US government that earn interest semi-annually.

2. How Does the Calculator Work?

The calculator uses the US Treasury EE Savings Bond formula:

Where:

• \( V \) — Current value of the bond (USD)
• \( P \) — Purchase amount (USD)
• \( rate \) — Annual interest rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula accounts for semi-annual compounding, where interest is calculated twice per year and added to the principal.

3. Importance of Savings Bond Calculation

Details: Accurate calculation of savings bond value helps investors track their investment growth, plan for future financial goals, and make informed decisions about holding or redeeming bonds.

4. Using the Calculator

Tips: Enter the original purchase amount in USD, the annual interest rate as a decimal (e.g., 0.025 for 2.5%), and the number of years the bond has been held. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are US Treasury EE Savings Bonds?
A: EE bonds are non-marketable, interest-bearing US government savings bonds that are guaranteed to double in value after 20 years.

Q2: How often do EE bonds earn interest?
A: EE bonds earn interest monthly and compound semi-annually. Interest is added to the bond's value every six months.

Q3: What is the minimum holding period for EE bonds?
A: EE bonds must be held for at least one year. If redeemed within the first five years, you forfeit the last three months of interest.

Q4: Are EE bonds taxable?
A: Interest earned on EE bonds is subject to federal income tax but exempt from state and local income taxes.

Q5: What happens if I hold EE bonds beyond 30 years?
A: EE bonds stop earning interest after 30 years from the issue date. They should be redeemed at that point.