Calculate Imputed Interest Zero Coupon Bond

Introduction & Importance

Zero coupon bonds are a type of bond that does not pay interest, but is sold at a discount to its face value. The difference between the face value and the purchase price is the interest earned. Calculating the imputed interest on these bonds is crucial for understanding their true value and potential return on investment.

For more information, see the Treasury Direct FAQs and the Investopedia guide to bonds.