Want a Guaranteed 3.6% Return?
by Doug on May.02, 2009, under Fixed Income
I know, the title sounds suspicious, but it is true. A series EE U.S. savings bond does what the title purports.
Currently (May, 2009) Series EE bonds are issued at a fixed 0.70% interest rate. Pathetic.
But, the U.S. Treasury guarantees the Series EE bond will double in value in 20 years. Using the rule of 72, 72/20 = 3.6 which means in 20 years the investment will return 3.6% annually in order to double in value. The U.S. Treasury will make a one-time adjustment to insure that the return is doubled in 20 years.
DtI – Doug the investor
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