The US government sells 2 types of savings bonds. One is called a series EE bond and has a fixed rate. The other is called an I bond-the / stands for inflation - and the rate adjusts based on inflation. These are both zero-coupon bonds and are different from other bonds because they do not have a "face value"/"par value". This is because investors can purchase the bonds for any amount between $25 and $10,000 so the redemption value (future value) of the bond depends on the dollar amount invested and the interest rate. Interest on these bonds compounds semi-annually. (More information on US Savings bonds) Suppose that you invest $500 in a Series EE bond with a yield to maturity of 2.44%. What will be the bond's value in 8 years?

A bond is fixed-income security where a lender comes into a contract with the borrower. The borrower agrees to make payment and interest at a specified date in the future or on maturity period. It is a type of financing that helps to fulfill and meet obl…