How do I work the interest rate out

newcastleneil

Hi
I bought £10000 worth of NSI index linked bonds (the ones that are now not for sale) I bought them in Nov 28 2008 ,They are now worth £10867 .Is this a good return .Also what is the average interest per year in %,so I can compare it to whats arround at the moment

Thanks:beer:

psychic_teabag

In 2 1/4 years, you've got just under £900, so to a first approximation that's £400 per year, or 4%.

To be a bit more precise, 1.0867 = x^2.25 so x = 1.0867 ^ (1/2.25) = 1.0376. ie just under 3.8% per year.

(Think that's right ..?)

Ifts

If I was you I would stick with them as not many savings bonds keep up with inflation at the moment. you will have the option to renew them at maturity.

There was a reason why they stopped doing the index linked bonds, it was costing NS&i too much, thats why they are no longer available to new money (existing ones can be renewed). I for one wish they still were!

Benefits of keeping them also discussed in these threads:

https://forums.moneysavingexpert.com/discussion/3000972
https://forums.moneysavingexpert.com/discussion/comment/40955372#Comment_40955372

atypical

You can use the brilliant Wolfram Alpha to do calculations like these very easily:

http://www.wolframalpha.com/input/?i=interest+calculator&a=FSelect_%2A%2APresentValueFutureValueDates-.PresentValueFutureValue.PresentValueFutureValueContinuous.PresentValueFutureValueContinuousDates.AnnuityFutureValueLumpsum.AnnuityPresentValueLumpsum.PrincipalAndInterest-&a=%2AFS-_%2A%2APresentValueFutureValueDates.i-.%2APresentValueFutureValueDates.PV-.%2APresentValueFutureValueDates.FV--&f3=%C2%A310867&f=PresentValueFutureValueDates.FV_%C2%A310867&f4=%C2%A310000&f=PresentValueFutureValueDates.PV_%C2%A310000&a=%2AFP.PresentValueFutureValueDates.compoundingfreq-_Annual&f6=28+Nov+2008&f=PresentValueFutureValueDates.ID_28+Nov+2008&f7=28+Feb+2011&f=PresentValueFutureValueDates.MD_28+Feb+2011&x=4&y=4

Answer comes out the same as psychic teabag's.