Calculate the earnings Sofia receives by using this formula
Yield = [(Principal + Interest) + Savings Account Accrual] / Principal
For example, let’s assume that Sofia redeems the bond after three years and has $10,000 worth of principal plus an additional $2,500 in accrued interest. It would be worth $12,500, which will accumulate for another five years in her savings account at 5.5%.
(1+0.055)^5 = 1.3385
$12,500 * 1.3385 = 16795
The total return over the period is calculated as follows:
(16795 + 12500) / 12500 = 2.1436 <=> 214% return over 8 year period.<
Overall it’s clear that while this approach could potentially provide larger yields under certain circumstances due compounding effect of interest rates most likely outcome will still remain below original expectations due lower accrual rate associated with savings account when compared against what was offered initially through bond purchase itself