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Inflation Bonds (I Bonds) are safe investments issued by the U.S. Treasury to protect individual's money from loosing value due to inflation. Interest rates on

Inflation Bonds (I Bonds) are safe investments issued by the U.S. Treasury to protect individual's money from loosing value due to inflation. Interest rates on I Bonds are adjusted regularly to keep pace with rising prices. Investors can buy up to $10,000 worth of I Bonds annually through the TreasuryDirect website. I Bonds interest is calculated using a composite rate based on two parts: A fixed rate set at purchase, that lasts for 30 years. An inflation rate that changes every six months, normally May 1 and November 1. The formula to calculate the composite rate is as follows I Bonds earn interest monthly. Interest earned is added to the value of the bond twice per year. This means the principal amount investors earn interest on increases every six months, positioning the money to be compound over time. The amount of money accumulated after a specific number of years (assuming the composite rate remains the same) can be calculated using the following formula

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