In the interest rate market, you are given annual interest rates of 8.000% in the United States and 5.000% in Japan. The interest rates are continuously compounded. An FI can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. In the currency market, you are given that the spot exchange rate is JPY 120 per one JPY. In addition, the one-year forward exchange rate is USD 0.0080 per one JPY.

Assuming that at time t=0 (now), an arbitrager can borrow or lend exactly USD 1,000,000 in the U.S. Interest rate (bond) market. Construct an arbitrage strategy whereby the arbitrager will have zero net cash flow at time t=0 (Now), but will have some positive net cash flow in USD at time one-year from now (t=12 months). What is the amount of that positive net cash flow in USD at time t=12 months? The abbreviation USD is for US Dollar, and JPY is for Japanese Yen.

(Give your answer in USD. Round-off to at least 4 decimal places. DO NOT GIVE YOUR ANSWER IN JPY. You are calculating net cash flow at t=12 months (one-year) in USD.)

(Hint: If your arbitrage strategy tells TO LEND the USD, then you must borrow the equivalent JPY using the spot exchange rate. Your final answer will be a number between 60,000 and 99,999.9999.)