A newly issued 20-year maturity, zero-coupon bond making annual coupon payments is issued with a yield to maturity of 8% and face value $1,000. Find the imputed interest income in the first, second, and last year of the bond's life.
Imputed Interest income in this case can be referred to where the investor does not receive any fixed annual interest payments but the bond itself has been purchased at a discount to the face value.
