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JamesSmithjust received a cash gift from his grandfather. He plans to invest in a five-year bond issued byBlossomCorp. that pays an annual coupon rate of4.0percent.

JamesSmithjust received a cash gift from his grandfather. He plans to invest in a five-year bond issued byBlossomCorp. that pays an annual coupon rate of4.0percent. If the current market rate is7.00percent, what is the maximum amountJamesshould be willing to pay for this bond?

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