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You are considering an investment in a financial asset which has a face value of $100,000 and is offering a fixed interest rate of 5%

You are considering an investment in a financial asset which has a face value of $100,000 and is offering a fixed interest rate of 5% per annum, compounding annually, for 5 years. Financial assets with a similar risk profile and term are currently trading on a yield of 4%.

How much do you estimate this financial asset to be currently worth?

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