Chapter 10, Problem 33PS

Summary Introduction

To calculate:

The imputed interest income of the zero coupon bond for first, second and last year of Bond's life where bonds have$20$years of maturity life and yield to maturity is$8\%$with face value$\$1000$

Introduction:

Imputed interest: The payment of interest to the bondholder in an effective manner and not in the actual monetary form is known as the income of imputed interest.