what is imputed interest?

Question

imputed rated

Answer 1

it's a term used to describe interest paid, but it's not really paid. (no interest payment made) Imputed interest is a factor for discount bonds and securities selling below face value and later mature at par.
Also, the IRS uses a method of imputed interest on treasury bonds to figure the yearly tax even though they don't pay interest till maturity.
(i hope we get a good grade for this)