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US Treasury EE Series Bond Formula:
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The US Treasury EE Series Bond formula calculates the current value of a savings bond based on the purchase amount, annual interest rate, and years held. EE bonds are low-risk government savings bonds that earn interest semi-annually.
The calculator uses the US Treasury EE Series Bond formula:
Where:
Explanation: The formula accounts for semi-annual compounding, where interest is calculated twice per year, making it more accurate than simple annual compounding.
Details: Accurate bond valuation helps investors understand the current worth of their investments, plan for future financial goals, and make informed decisions about holding or redeeming bonds.
Tips: Enter the 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, interest rate ≥ 0, years ≥ 0).
Q1: What are US Treasury EE Series Bonds?
A: EE bonds are non-marketable, interest-bearing U.S. government savings bonds that are guaranteed to double in value after 20 years.
Q2: How often do EE bonds compound interest?
A: EE bonds compound interest semi-annually, meaning interest is calculated and added to the principal twice per year.
Q3: What is the minimum investment for EE bonds?
A: The minimum purchase amount for EE bonds is $25, and they can be purchased in any amount above that in penny increments.
Q4: Are there tax advantages to EE bonds?
A: Yes, interest earned on EE bonds is exempt from state and local taxes, and federal taxes can be deferred until redemption or maturity.
Q5: What happens if I redeem my EE bond before 5 years?
A: If redeemed before 5 years, you'll lose the last 3 months of interest. After 5 years, there's no penalty for early redemption.