3. In this chapter we have discussed long-term bonds as if there were only one type, coupon bonds. In fact there are also long-term discount bonds. A discount bond is sold at a low price and the whole return comes in the form of a price appreciation. You can easily compute the current price of a discount bond using the financial calculator at http://app.ny.frb.org/sbr/.

To compute the redemption values for savings bonds, fill in the information at the site and click on the Compute Values button. A maximum of five years of data will be displayed for each computation.