With absolutely no time to surf da 'net, I haven’t had a chance ('til now) to come in here and say hey to everyone. Just wanted y’all to know that I ain’t no federal employee no more. El Hubbo, my best friend and I all went to the Gasthof zuer Gemeutlichkeit (German restaurant here in Minneapolis) on Saturday night to celebrate. That place is wild. People singing, chanting, stomping on tables and of course, drinking mass quantities of beer. I joined right in and we all toasted my new job at midnight (my official release from the gov’t).
So now I’m fully entrenched in the banking world. I’m writing from my new hire class; two minutes before it starts and the room is empty except for me. Nobody care about being on time these days, sheesh!
Well, I sure do miss the millions that be teemin’ and stuff.
Can you explain savings bonds to me? Yesterday, I redeemed an EE bond bought in 7/86 with a face value of $200. The teller said the interest was $140 and the redemption value $240. She said I paid half the face value for it in 1986, which is $100.
If the interest on $100 for 14 years was $140, then that sounds like it was 10% simple interest rate. However, according to the savings bond web site, EE’s earn 5.1% interest compounded semi-annually. Wouldn’t that be more than $10 interest per year?
Congrats, Canthearya, and best of luck in your new job! Hope it proves to be everything you’d hope.
Cheese, I was going to try to answer your question, along with a nice little spiel about the miracle of compounding. But I get that your bond should be worth $197.36 (=$100 x 1.0255^27), not $240, so I’m not much help. Maybe someone else knows a pertinent question to ask about the bond, because I’m sure I calculated the interest correctly.
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Not that it’s gone to my head or anything.
According to http://www.savingsbonds.com/current1.htm the interest rate for EE bonds is currently 5.18% payed twice a year (semiannually). That would be $10 interest per year (rounding to nearest dollar). 14 years of that does add up to $140 total interest, but how come it is not compounded?