How to use bootstrapping method to calculate the T zero curve from a given set of data of government bills of different maturities?If i am not wrong, bootstrapping method allows us to find the zero-coupon discount rates for bonds of all maturities?What is the difference between bootstrapping & interpolation??Thanks

Search the general and student formulas, there's plenty already posted on this.

Bootstrapping creates zero coupon rates from coupon-paying rates at discrete, observable tenors. Interpolation is used to infer the value of zero rates (or discount factors) between the bootstraped tenors. As exotiq says, there is much information available on this topic by using the search feature on this website.

Interpolation is a simple arithmetic average of the two numbers involved. YTM or the yield curve should technically denote the level of interest rates for the tenors existing in the market. For eg. if there are 10 points on the Yield curve then each of the point will denote the interest rate of the Zero Coupon bond of that tenure. However, coupon paying bonds can be seen as a bunch of zero coupon bonds. Let us assume that the market is trading a 6M and 12 M zero. We need to calculate the zero rate for 18 M given the 18 bond rate. We can calculate the zero for 18 month and use that to further calculate the 24 month zero and so on and so forth. why do we need bootstraping? because we need to discount each of the cashflows arising out of any swap at the discount factor for that tenure. The correct discount factor is calculated from the Zero coupon bond and not the coupon bearing bond of that tenure as it comprises of different cashflows arising at various times.