1. What is the US Treasury EE Bond Formula?

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

2. How Does the Calculator Work?

The calculator uses the EE Bond formula:

Where:

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

Explanation: The formula accounts for semi-annual compounding of interest, where the annual rate is divided by 2 and compounded twice per year over the holding period.

3. Importance of EE Bond Calculation

Details: Accurate EE bond valuation helps investors track their savings growth, plan for future financial goals, and understand the return on their government-backed investments.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.025 for 2.5%), and years held. All values must be valid (purchase amount > 0, rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What are US Treasury EE Bonds?
A: EE Bonds are US government savings bonds that earn interest for up to 30 years. They are guaranteed to double in value after 20 years.

Q2: How often does interest compound on EE Bonds?
A: Interest compounds semi-annually, meaning it's calculated and added to the bond's value twice per year.

Q3: What is the minimum investment for EE Bonds?
A: The minimum purchase amount is $25 for electronic EE Bonds through TreasuryDirect.

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

Q5: Can EE Bonds be redeemed early?
A: EE Bonds must be held for at least one year, and redeeming within 5 years results in a penalty of the last 3 months' interest.