Zero coupon bonds do not pay interest periodically to bondholders.The amount paid at maturity includes all accrued interest to that date.

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Zero coupon bonds are issued at a deep discount to their face value and do not pay periodic interest payments. Instead, the bondholder receives a lump sum payment at maturity that includes all the accrued interest up to that point.

Zero Coupon Bonds Do Not Pay Interest Periodically to Bondholders