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How the Spigot Bond Works

REI Capital Introducing: The Spigot Bond

With the Spigot Bond, you decide how much of your interest to accrue to principal if you want to earn interest on the interest. You can turn that accrual up, down, or off during the term of the bond.

Animated example of selecting accrued-to-principal choices and watching the chart update
Principal at maturity $67,443
Annual cash income $2,625
Paid quarterly 5.44%
Accrued to principal 1.81%
Inputs

Set your spigot

$
Amount should be entered in $500 increments.
1.81% accrues to principal. 5.44% is paid out quarterly.
Use 0 for no cutoff. If set, accrual stops after that year and cash payments use the full bond rate.
Live Projection

Principal growth and cumulative cash payments by year

Principal Cumulative Cash Initial Investment
Annual Cash Income $2,625 Cash pay rate: 5.44%
Quarterly Cash Payment $656 Estimated regular quarterly payout
Principal At Maturity $67,443 Includes accrued PIK principal
Projected Outcome
Total Projected Cash Payments$39,375
Total Interest Accrued To Principal$17,443
Total Interest Yield7.25%
Total Projected Payout$106,818
Number of $100 Bond Units500
Annual Details

Year-by-year income breakdown
Important disclaimer

This calculator is for educational projection purposes only. REI Capital Income and REI Capital Management are not guaranteeing returns, performing investment advice, or promising that these calculations are accurate. Actual results may be higher, lower, delayed, or negative.

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