If an investor purchases a 5%, 2-year annual coupon TIPS at its par value of $1,000 and the CPI increases 3% over each of the next 2 years, how many dollars in total will the investor receive over the next two years? (Hint: The CPI increase rate is the inflation rate.) $

WRONG ANSWERS :

1. the dollar value of TIPS in total after 2 years will be $1,040.00.

2. The final answer is $1,062.00. The investor will receive a total of $1,062.00 over the next two years from the 5%, 2-year annual coupon TIPS at its par value of $1,000 if the CPI increases 3% over each of the next 2 years.

MAYBE BUT IT CAN BE OTHER ANSWER?

3. the investor will receive a total of $160.90 over the next two years

4. The investor will receive a total of $104.55 over the next two years.

PLEASE PROVIDE STEPS.