Eyebonds.Info Question

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Doc7
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Eyebonds.Info Question

Post by Doc7 »

Hello,

I downloaded the excellent calculator to utilize as a tracking tool:

Image

I notice the same phenomena occurring there as on this site:

http://eyebonds.info/ibonds/10000/ib_2021_03.html

The interest is not consistent from month to month even in the periods where no bonds are experiencing a changing composite rate on my portfolio, and in that link above, you can see that it is showing the $10,000 bond gaining $60 from Apr 1 to May 1, $60 from May 1 to June 1, but then $64 from June 1 to July 1, and then $60 again from July 1 to Aug 1.

Any ideas what's up with this?
MrJedi
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Re: Eyebonds.Info Question

Post by MrJedi »

Possibly due to the wacky rounding that the treasury uses?
Topic Author
Doc7
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Re: Eyebonds.Info Question

Post by Doc7 »

MrJedi wrote: Mon Jan 17, 2022 2:42 pm Possibly due to the wacky rounding that the treasury uses?
I considered this as I know calculations are made on $25 increments but that wouldn't explain a step up and then a step back down, would it?
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Lee_WSP
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Re: Eyebonds.Info Question

Post by Lee_WSP »

Doc7 wrote: Mon Jan 17, 2022 2:45 pm
MrJedi wrote: Mon Jan 17, 2022 2:42 pm Possibly due to the wacky rounding that the treasury uses?
I considered this as I know calculations are made on $25 increments but that wouldn't explain a step up and then a step back down, would it?
It would if they need to pay out $12.5 each month. You’d have to overpay one month and underpay the next.
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Re: Eyebonds.Info Question

Post by BrokerageZelda »

A $10,000 I Bond pays interest in increments of $4 because every penny on the $25 bond reference value is multiplied by 400.

The interest over the six-month period is calculated to exact values with respect to the compounded principal and effective interest rate, but rounded to the nearest $4 for redemption value purposes.

Doing the math along with eyebonds.info, for a March 2021 $10k I Bond, the monthly interest on compounded principal of $10,264 from March 1 to September 1 is $60.90.

March 1: $10,264
April 1: $10,324.90 -> rounds down to $10,324
May 1: $10,385.80 -> rounds down to $10,384
June 1: $10,446.70 -> rounds down to $10,444
July 1: $10,507.60 -> rounds up to $10,508
August 1: $10,568.50 -> rounds down to $10,568
September 1: $10,629.40 -> rounds down to $10,628
Topic Author
Doc7
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Re: Eyebonds.Info Question

Post by Doc7 »

BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm A $10,000 I Bond pays interest in increments of $4 because every penny on the $25 bond reference value is multiplied by 400.

The interest over the six-month period is calculated to exact values with respect to the compounded principal and effective interest rate, but rounded to the nearest $4 for redemption value purposes.

Doing the math along with eyebonds.info, for a March 2021 $10k I Bond, the monthly interest on compounded principal of $10,264 from March 1 to September is $60.90.

March 1: $10,264
April 1: $10,324.90 -> rounds down to $10,324
May 1: $10,385.80 -> rounds down to $10,384
June 1: $10,446.70 -> rounds down to $10,444
July 1: $10,507.60 -> rounds up to $10,508
August 1: $10,568.50 -> rounds down to $10,568
September 1: $10,629.40 -> rounds down to $10,628
Incredible info, thank you very much! Also to Lee_WSP.

Interestingly, the calculator doesn't appear to be handling the $8K and $2K bonds as well with regards to the $4 incremental rounding. That is why there are cents values appearing in the portfolio value.
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Re: Eyebonds.Info Question

Post by BrokerageZelda »

Doc7 wrote: Mon Jan 17, 2022 3:03 pm
BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm A $10,000 I Bond pays interest in increments of $4 because every penny on the $25 bond reference value is multiplied by 400.

The interest over the six-month period is calculated to exact values with respect to the compounded principal and effective interest rate, but rounded to the nearest $4 for redemption value purposes.

Doing the math along with eyebonds.info, for a March 2021 $10k I Bond, the monthly interest on compounded principal of $10,264 from March 1 to September is $60.90.

March 1: $10,264
April 1: $10,324.90 -> rounds down to $10,324
May 1: $10,385.80 -> rounds down to $10,384
June 1: $10,446.70 -> rounds down to $10,444
July 1: $10,507.60 -> rounds up to $10,508
August 1: $10,568.50 -> rounds down to $10,568
September 1: $10,629.40 -> rounds down to $10,628
Incredible info, thank you very much! Also to Lee_WSP.

Interestingly, the calculator doesn't appear to be handling the $8K and $2K bonds as well with regards to the $4 incremental rounding. That is why there are cents values appearing in the portfolio value.
$8k bonds and $2k bonds have different step increments, because "a penny at $25" means $3.20 at $8k and it means 80 cents at $2k.
Topic Author
Doc7
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Re: Eyebonds.Info Question

Post by Doc7 »

BrokerageZelda wrote: Mon Jan 17, 2022 3:06 pm
Doc7 wrote: Mon Jan 17, 2022 3:03 pm
BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm A $10,000 I Bond pays interest in increments of $4 because every penny on the $25 bond reference value is multiplied by 400.

The interest over the six-month period is calculated to exact values with respect to the compounded principal and effective interest rate, but rounded to the nearest $4 for redemption value purposes.

Doing the math along with eyebonds.info, for a March 2021 $10k I Bond, the monthly interest on compounded principal of $10,264 from March 1 to September is $60.90.

March 1: $10,264
April 1: $10,324.90 -> rounds down to $10,324
May 1: $10,385.80 -> rounds down to $10,384
June 1: $10,446.70 -> rounds down to $10,444
July 1: $10,507.60 -> rounds up to $10,508
August 1: $10,568.50 -> rounds down to $10,568
September 1: $10,629.40 -> rounds down to $10,628
Incredible info, thank you very much! Also to Lee_WSP.

Interestingly, the calculator doesn't appear to be handling the $8K and $2K bonds as well with regards to the $4 incremental rounding. That is why there are cents values appearing in the portfolio value.
$8k bonds and $2k bonds have different step increments, because "a penny at $25" means $3.20 at $8k and it means 80 cents at $2k.
Now I understand, this was explained in your first sentence in your first reply. Thanks again!

This calculator is really something else. With a tool like this, I'll truly not understand the hesistancy of some to use IBonds simply due to the TD.Gov interface. You could conceivably not log in for 30 years and still be just as informed with a tool like this.
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Lee_WSP
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Re: Eyebonds.Info Question

Post by Lee_WSP »

It certainly adds a little bit more arbitrage into when to sell the bonds. Ideally you sell when the three lower payments are the last three months. :sharebeer
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Mel Lindauer
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Re: Eyebonds.Info Question

Post by Mel Lindauer »

Lee_WSP wrote: Mon Jan 17, 2022 3:15 pm It certainly adds a little bit more arbitrage into when to sell the bonds. Ideally you sell when the three lower payments are the last three months. :sharebeer
Yes, that's the smart way to redeem. Sometimes, when the rate drops to where someone decides to redeem, or when someone is considering redeeming for other reasons, it's smart to hold for three months at the low rate rather than forfeiting three month's interest at a good rate.
Best Regards - Mel | | Semper Fi
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user9532
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Re: Eyebonds.Info Question

Post by user9532 »

Another i bond calculator

https://eworkpaper.com/ibond.php
Broken Man 1999
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Re: Eyebonds.Info Question

Post by Broken Man 1999 »

Doc7 wrote: Mon Jan 17, 2022 3:08 pm
BrokerageZelda wrote: Mon Jan 17, 2022 3:06 pm
Doc7 wrote: Mon Jan 17, 2022 3:03 pm
BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm A $10,000 I Bond pays interest in increments of $4 because every penny on the $25 bond reference value is multiplied by 400.

The interest over the six-month period is calculated to exact values with respect to the compounded principal and effective interest rate, but rounded to the nearest $4 for redemption value purposes.

Doing the math along with eyebonds.info, for a March 2021 $10k I Bond, the monthly interest on compounded principal of $10,264 from March 1 to September is $60.90.

March 1: $10,264
April 1: $10,324.90 -> rounds down to $10,324
May 1: $10,385.80 -> rounds down to $10,384
June 1: $10,446.70 -> rounds down to $10,444
July 1: $10,507.60 -> rounds up to $10,508
August 1: $10,568.50 -> rounds down to $10,568
September 1: $10,629.40 -> rounds down to $10,628
Incredible info, thank you very much! Also to Lee_WSP.

Interestingly, the calculator doesn't appear to be handling the $8K and $2K bonds as well with regards to the $4 incremental rounding. That is why there are cents values appearing in the portfolio value.
$8k bonds and $2k bonds have different step increments, because "a penny at $25" means $3.20 at $8k and it means 80 cents at $2k.
Now I understand, this was explained in your first sentence in your first reply. Thanks again!

This calculator is really something else. With a tool like this, I'll truly not understand the hesistancy of some to use IBonds simply due to the TD.Gov interface. You could conceivably not log in for 30 years and still be just as informed with a tool like this.
True.

Or, one could load and save their paper bond inventory in the savings bond calculator at TD and print a nice report monthly. Electronic bond holdings are also easily tracked, easy to download nice reports on them as well. You don't have to do any loading like the paper bonds, just download your report when you want to do so.

Downloading and printing my updated reports is a favorite task of mine on the first day of every month. No matter what the stock market might be doing, always nice to see something that is always increasing in value. Unlike our IRAs this year. :(

So far as the TD site, the only thing I have to remember is to not use my browser back button. TD isn't the prettiest site, but it works well for my limited visits: buying I-bonds and updating the value of the I-bonds.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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Re: Eyebonds.Info Question

Post by tonyclifton »

user9532 wrote: Mon Jan 17, 2022 4:04 pm Another i bond calculator

https://eworkpaper.com/ibond.php
This is a nice looking calculator. You must have secret knowledge as it isn't listed as either a tool or a calculator on the site :happy
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Re: Eyebonds.Info Question

Post by user9532 »

tonyclifton wrote: Mon Jan 17, 2022 4:31 pm
user9532 wrote: Mon Jan 17, 2022 4:04 pm Another i bond calculator

https://eworkpaper.com/ibond.php
This is a nice looking calculator. You must have secret knowledge as it isn't listed as either a tool or a calculator on the site :happy
I will link it to the calculator section. It is listed on the main page though.
tonyclifton
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Re: Eyebonds.Info Question

Post by tonyclifton »

user9532 wrote: Mon Jan 17, 2022 5:11 pm I will link it to the calculator section. It is listed on the main page though.
Noted! Thanks!
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Re: Eyebonds.Info Question

Post by rustwood »

Can someone please explain why my $10k July 2021 i bond shows $88 interest on the TD site, but twice that in both of the online calculators in this thread? It seemed wrong when I saw it at TD and I am sure there is a reason, but I am not having any luck finding it. My spouse's i bond shows the same thing.
Makefile
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Re: Eyebonds.Info Question

Post by Makefile »

rustwood wrote: Mon Jan 17, 2022 6:12 pm Can someone please explain why my $10k July 2021 i bond shows $88 interest on the TD site, but twice that in both of the online calculators in this thread? It seemed wrong when I saw it at TD and I am sure there is a reason, but I am not having any luck finding it. My spouse's i bond shows the same thing.
TreasuryDirect already has the early redemption penalty (before five years) of three months' interest deducted
rustwood
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Re: Eyebonds.Info Question

Post by rustwood »

Makefile wrote: Mon Jan 17, 2022 6:23 pm
rustwood wrote: Mon Jan 17, 2022 6:12 pm Can someone please explain why my $10k July 2021 i bond shows $88 interest on the TD site, but twice that in both of the online calculators in this thread? It seemed wrong when I saw it at TD and I am sure there is a reason, but I am not having any luck finding it. My spouse's i bond shows the same thing.
TreasuryDirect already has the early redemption penalty (before five years) of three months' interest deducted
Of course! I might have figured that out if I'd checked it last month or next month. Thank you :beer
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Re: Eyebonds.Info Question

Post by #Cruncher »

BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm ...
June 1: $10,446.70 -> rounds down to $10,444
...
$10,444 is the correct value for June 2022 for a $10,000 I Bond with 0.00% Fixed Rate Purchased March 2021. However, $10,446.70 rounded to the nearest $4 would be $10,448 which is not the correct value. You're going at this the wrong way, BrokerageZelda. You're assuming that 1/6 of the entire six month's interest is added every month. This isn't how it's done. As is explained in the Wiki's How interest is calculated, the value after m months of each six month period grows by (1 + c / 2) ^ (m / 6) where c is the annual composite rate. For example, after one year a $25 bond will grow to $25.66 in March 2022. The value three months later in June 2022 is calculated as 26.1128 = 25.66 * (1 + 0.0712 / 2) ^ (3 / 6). This rounds to $26.11 which scales up to $10,444.

Here is the complete calculation from March 2021 through September 2022:

Code: Select all

  1  Face value  10,000
  2  Fixed rate   0.00%
  3   Inflation   Rates
  4    Nov 2020   0.84%
  5    May 2021   1.77%
  6    Nov 2021   3.56%
  7                      Inflat  Compos    6 mo     Value    Roun   Scaled  Inte
  8               Month    Rate    Rate    Base  Grows To     ded    X 400  rest

Code: Select all

  9    Mar 2021       1   0.84%   1.68%   25.00             25.00   10,000      
 10    Apr 2021       2   0.84%   1.68%   25.00   25.0349   25.03   10,012    12
 11    May 2021       3   0.84%   1.68%   25.00   25.0698   25.07   10,028    16
 12    Jun 2021       4   0.84%   1.68%   25.00   25.1048   25.10   10,040    12
 13    Jul 2021       5   0.84%   1.68%   25.00   25.1398   25.14   10,056    16
 14    Aug 2021       6   0.84%   1.68%   25.00   25.1749   25.17   10,068    12

 15    Sep 2021       1   1.77%   3.54%   25.21   25.2100   25.21   10,084    16
 16    Oct 2021       2   1.77%   3.54%   25.21   25.2838   25.28   10,112    28
 17    Nov 2021       3   1.77%   3.54%   25.21   25.3579   25.36   10,144    32
 18    Dec 2021       4   1.77%   3.54%   25.21   25.4321   25.43   10,172    28
 19    Jan 2022       5   1.77%   3.54%   25.21   25.5066   25.51   10,204    32
 20    Feb 2022       6   1.77%   3.54%   25.21   25.5813   25.58   10,232    28

 21    Mar 2022       1   3.56%   7.12%   25.66   25.6562   25.66   10,264    32
 22    Apr 2022       2   3.56%   7.12%   25.66   25.8100   25.81   10,324    60
 23    May 2022       3   3.56%   7.12%   25.66   25.9610   25.96   10,384    60
 24    Jun 2022       4   3.56%   7.12%   25.66   26.1128   26.11   10,444    60 <===
 25    Jul 2022       5   3.56%   7.12%   25.66   26.2654   26.27   10,508    64
 26    Aug 2022       6   3.56%   7.12%   25.66   26.4190   26.42   10,568    60
 
 27    Sep 2022                                   26.5735   26.57   10,628    60
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Re: Eyebonds.Info Question

Post by BrokerageZelda »

#Cruncher wrote: Tue Jan 18, 2022 12:22 am
BrokerageZelda wrote: Mon Jan 17, 2022 3:01 pm ...
June 1: $10,446.70 -> rounds down to $10,444
...
$10,444 is the correct value for June 2022 for a $10,000 I Bond with 0.00% Fixed Rate Purchased March 2021. However, $10,446.70 rounded to the nearest $4 would be $10,448 which is not the correct value. You're going at this the wrong way, BrokerageZelda. You're assuming that 1/6 of the entire six month's interest is added every month. This isn't how it's done. As is explained in the Wiki's How interest is calculated, the value after m months of each six month period grows by (1 + c / 2) ^ (m / 6) where c is the annual composite rate. For example, after one year a $25 bond will grow to $25.66 in March 2022. The value three months later in June 2022 is calculated as 26.1128 = 25.66 * (1 + 0.0712 / 2) ^ (3 / 6). This rounds to $26.11 which scales up to $10,444.

Here is the complete calculation from March 2021 through September 2022:

Code: Select all

  1  Face value  10,000
  2  Fixed rate   0.00%
  3   Inflation   Rates
  4    Nov 2020   0.84%
  5    May 2021   1.77%
  6    Nov 2021   3.56%
  7                      Inflat  Compos    6 mo     Value    Roun   Scaled  Inte
  8               Month    Rate    Rate    Base  Grows To     ded    X 400  rest

Code: Select all

  9    Mar 2021       1   0.84%   1.68%   25.00             25.00   10,000      
 10    Apr 2021       2   0.84%   1.68%   25.00   25.0349   25.03   10,012    12
 11    May 2021       3   0.84%   1.68%   25.00   25.0698   25.07   10,028    16
 12    Jun 2021       4   0.84%   1.68%   25.00   25.1048   25.10   10,040    12
 13    Jul 2021       5   0.84%   1.68%   25.00   25.1398   25.14   10,056    16
 14    Aug 2021       6   0.84%   1.68%   25.00   25.1749   25.17   10,068    12

 15    Sep 2021       1   1.77%   3.54%   25.21   25.2100   25.21   10,084    16
 16    Oct 2021       2   1.77%   3.54%   25.21   25.2838   25.28   10,112    28
 17    Nov 2021       3   1.77%   3.54%   25.21   25.3579   25.36   10,144    32
 18    Dec 2021       4   1.77%   3.54%   25.21   25.4321   25.43   10,172    28
 19    Jan 2022       5   1.77%   3.54%   25.21   25.5066   25.51   10,204    32
 20    Feb 2022       6   1.77%   3.54%   25.21   25.5813   25.58   10,232    28

 21    Mar 2022       1   3.56%   7.12%   25.66   25.6562   25.66   10,264    32
 22    Apr 2022       2   3.56%   7.12%   25.66   25.8100   25.81   10,324    60
 23    May 2022       3   3.56%   7.12%   25.66   25.9610   25.96   10,384    60
 24    Jun 2022       4   3.56%   7.12%   25.66   26.1128   26.11   10,444    60 <===
 25    Jul 2022       5   3.56%   7.12%   25.66   26.2654   26.27   10,508    64
 26    Aug 2022       6   3.56%   7.12%   25.66   26.4190   26.42   10,568    60
 
 27    Sep 2022                                   26.5735   26.57   10,628    60
Duly noted! Thanks for setting me straight.

(Always something new to learn! 😅)
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Re: Eyebonds.Info Question

Post by mangorunner »

#Cruncher wrote: Tue Jan 18, 2022 12:22 am $10,444 is the correct value for June 2022 for a $10,000 I Bond with 0.00% Fixed Rate Purchased March 2021. However, $10,446.70 rounded to the nearest $4 would be $10,448 which is not the correct value. You're going at this the wrong way, BrokerageZelda. You're assuming that 1/6 of the entire six month's interest is added every month. This isn't how it's done. As is explained in the Wiki's How interest is calculated, the value after m months of each six month period grows by (1 + c / 2) ^ (m / 6) where c is the annual composite rate. For example, after one year a $25 bond will grow to $25.66 in March 2022. The value three months later in June 2022 is calculated as 26.1128 = 25.66 * (1 + 0.0712 / 2) ^ (3 / 6). This rounds to $26.11 which scales up to $10,444.

Here is the complete calculation from March 2021 through September 2022:
...
Cruncher, thanks a million for this post - including your calculations and formulas! This was the real light-bulb, eye-opener for me. I had been struggling to match various online I bond calculators and this post was the bomb diggity. :sharebeer
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