I call BS on these numbers. Unless there were derivatives involved I can’t see how these could compound so much.
If you don’t pay until the end, the payout is (1+rate)^years. 1.08^30=10.06 times the loan for 8% for 30 years.
Read the article again.
Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.
They made no payments for years on either interest or principle, so the interest just begins compounding on itself as well as on the principle. In essence, they not only didn't make any payments for whatever the term was, but also borrowed the interest on that principle every month at the same interest rate.
They were idiots to take out those kind of loans, and what ever oversight agency they might have were idiots to allow them to do that.