US Savings Bonds

Posts Tagged ‘savings bond’

Question: What kind of future does the younger generation of working US citizens really have with this kind of governme?

What can the younger generation of working US citizens do about the severe risks to their future? I invest money in the stock market but it has only gone down. I invest money in bonds and savings accounts but the small gains do not keep up with inflation (it costs more to buy everything and the actual dollars lose their value as well). I am told not to count on there being much Social Security when I retire. How can I build a future for myself if my investments and savings continue to lose value due to a greedy and irresponsible government?

Answer: Indentured slavery! You must take over rule & control directly starting with money & gov’t! Legally end Republic of’by/for the Fascist Few/Representative Gov’t! Replace with a True direct consensus Democracy that has verification/proof/validation! Make all levels of Gov’t well managed fire at will employee’s! Many will try denying this state of Fascism but it’s real and long been in place. Make sure you scroll down to #14 Fraudulent election process >>> http://www.oldamericancentury.org/14pts.htm Should of Known i am being had you are a troll playing games & not being serious!

Investors protest Lehman-bond mis-selling

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Question: A US savings bond for $500 as an interest reate of 11% compounded monthly…?

a. How much will the bond be worth when it matures after 25 years?

b. if the annual rate of inflation (which lowers the value of money) is 3% during those 25 years, the value of the bond will be less. What will its value be after 25 years?

Explain why.

Answer: a) since interest is compounded monthly adjust the interest rate to per month
r = 11/12% per month, n = 12×25 months
using compound interest formula

Value at end of 25th year = 500(1 + (11/12)/100)^(12×25)

b)
value at end of each year = compounded value – inflation
value end of 1st year
= 500(1 + (11/12)/100)^12 – 0.3(500( 1 + (11/12)/100)^(12)) = 0.7(500(1 + (11/12)/100)^12)

value end of 2nd year = value end of 1st year – inflation
= 0.7(500(1 + (11/12)/100)^12) – 0.3×0.7(500(1 + (11/12)/100)^12)
= 0.7^2(500(1 + (11/12)/100)^12)

value end of 3rd year = value end of 2nd year – inflation
= 0.7^2(500(1 + (11/12)/100)^12) – 0.3×0.7^2(500(1 + (11/12)/100)^12)
= 0.7^3(500(1 + (11/12)/100)^12)

looks like a pattern is developing!

Value end of 25th year = 0.7^25(500(1 + (11/12)/100)^12

I hope this helps

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