(a) Formula for redemption value. We determine the redemption value of a bond for the accrual date (the first day of each month beginning with the fourth month from the issue date) in accordance with this section and the following formula:
FV = PV × {[1 + (i ÷ 2)](m/6)}
where
FV (future value) = redemption value on redemption date rounded to the nearest cent.
PV (present value) = redemption value at the beginning of the semiannual rate period
i = savings bonds rate converted to decimal form by dividing by 100.
m = number of full calendar months outstanding during the semiannual rate period.[1]
(b) Value of bonds at original maturity -
(1) Definitive bond. At original maturity, the redemption value of a definitive bond shall not be less than the face amount/denomination of the bond.
(2) Book-entry bond. At original maturity, the redemption value of a book-entry bond shall not be less than double the purchase price of the bond.