On January 1, 2016, Kunto, a cash basis taxpayer, pays $136,835 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $148,000. In your computations, round any amounts to the nearest dollar. 136,835 x income for 2016 and s Kunto has $ Feedhed Cha My W x for 2017, Lenders frequently make loans that require a payment at maturity of more than the amount of the original loan. The difference between the amount due at maturity is actually interest but is referred to as original issue discount.