U.S. Savings bond question
I am trying to establish the cash-in value on a group of bonds that have been cashed. I know the following about the bonds:
These are all E and EE Bonds that have all reached maturity and were all earning interest beyond their Face Value. And I know the face value of each bond.
I also have a statement from the IRS which indicates the actual earned interest on these bonds when they were cashed.
So...since I know two pieces of factual information about the bonds; Face Value and actual IRS reported earned interest, would I arrive at the actual cash-in value by using the following formula?
KNOWN FACE VALUE + KNOWN EARNED INTEREST = TOTAL CASH-IN VALUE
I have had three people (supposedly experts) say "YES" this formula is correct at arriving at actual cash-in total. However, I had one expert say "No" this is not correct for the following reason: He stated that paper bonds are purchased at 1/2 of the face value and part of the earned interest is what is used to make up the other half of face value; and then earning additional interest beyond the face value of the bond. So he said the CORRECT formula would be:
1/2 OF KNOWN FACE VALUE + KNOWN EARNED INTEREST = TOTAL CASH-IN VALUE.
I'm getting these two conflicting opinions. Which one is correct?