Suppose a portfolio manager purchases a $2 mi of par value of Treasury Inflation protection Security (TIPS). The real rate determined at the auction is 3.5%. Assume that the CPI-U is likely to be 3.2% (annual rate) for the next 2 years.

1- Inflation adjustment to principal at the end of eighteen months is

2-Inflation adjusted principal at the end of eighteen months is

3- The coupon payment to the investor at the end of eighteen months is