Discounted Interest Payment

Zero Rate Interest Payment - A Zero Rate Interest Payment, also known as a Discounted Payment, is a financial arrangement where the borrower does not make periodic interest payments, but instead pays a lump sum at maturity that includes both the principal and the interest. The interest, in this case, is represented by the difference between the amount received at issuance and the higher amount paid at maturity, effectively being "discounted" from the face value.

Class Information

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Identification

Label (rdfs)
Zero Rate Interest Payment
Preferred Label
Discounted Interest Payment
Alternative Labels
Pure Discount Bond, Zero-Coupon Bond
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Definition and Examples

Definition
A Zero Rate Interest Payment, also known as a Discounted Payment, is a financial arrangement where the borrower does not make periodic interest payments, but instead pays a lump sum at maturity that includes both the principal and the interest. The interest, in this case, is represented by the difference between the amount received at issuance and the higher amount paid at maturity, effectively being "discounted" from the face value.
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Additional Information

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Deprecated
False

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