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You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM of 8 percent, and

You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM of 8 percent, and 5 years to maturity. You hold the bond for the entire year. Assume semiannual compounding.

How much interest income will you have to declare on your tax return?

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