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Author: mkt Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: TMF Pixy - Qt. about I Bonds Date: 7/19/2000 12:08 PM
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David,

I finally read your article on Inflation-Protected
Investments from 6/26/00.

I have a question about the interest on the I Bonds.
Is the interest compounded? In other words, does the
monthly interest earn interest in the future or does
only the original principal earn interest?

Thanks,
mkt
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 23482 of 76237
Subject: Re: TMF Pixy - Qt. about I Bonds Date: 7/19/2000 12:35 PM
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Mkt asks:

<<I have a question about the interest on the I Bonds. Is the interest compounded? In other words, does the monthly interest earn interest in the future or does only the original principal earn interest?>>

The interest is paid monthly and compounded semiannually. Thus, the interest does earn interest, but there is a time lag until the next semiannual compounding period before it does.

Regards..Pixy

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