Imputed interest question.

[Fred Borek]

Is imputed interest for the seller calculated off the entire amount or income received. eg is it taxed on the remaining balance like 200000 with 2 percent tax and 2000 a month payment would be 333 the first month, 330 the second month OR is it like if i pay 2000 a month for 12 months they would pay 2% of that which is 480.