31 C.F.R. § 351.16 What do I need to know about the base denomination for redemption value calculations?
Title 31 - Money and Finance: Treasury
We base all calculations of interest on a unit with a principal amount of $12.50. We use this unit value to determine the value of bonds in higher denominations. The effect of rounding off the value of the $12.50 unit increases at higher denominations. This can work to your slight advantage or disadvantage, depending on whether the value is rounded up or down. Example. The following hypothetical example illustrates the calculation: A rate of 3.25% will result in a newly purchased $12.50 unit increasing in value after six months to $12.70, when rounded to the nearest cent. Therefore, a $5,000 definitive Series EE bond (with a principal amount of $2,500) will be worth $2,540 after six months ([$2,500 divided by $12.50] × $12.70 = $2,540.) In contrast, if applied directly to a $2,500 principal amount, the rate would render a value of $2,540.63 after six months, a difference of 63 cents. (This example does not account for any interest penalty that might apply if you redeem a bond less than five years after its issue date.)
Title 31: Money and Finance: Treasury
PART 351—OFFERING OF UNITED STATES SAVINGS BONDS, SERIES EE
Subpart B—Maturities, Redemption Values, and Investment Yields of Series EE Savings Bonds
General Provisions
§ 351.16 What do I need to know about the base denomination for redemption value calculations?
