Question: A five-year TIPS bond has a $5000 real par value and pays a 2% real coupon every year. The inflation rate is 4% per year.

A five-year TIPS bond has a $5000 real par value and pays a 2% real coupon every year. The inflation rate is 4% per year. What will the nominal value of the total payment be in the 5th/ last year of the bond? Please show work.

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