This Morning, Alicia Bought a Ten-Year 7% Coupon Bond That

This morning, Alicia bought a ten-year 7% coupon bond that pays interest annually. She paid $994 for a $1,000 bond. If the market interest rate on this type of bond declines to 6.5% tonight, how
Much will Alicia receive for her first interest payment?

A) $32.31
B) $35.00
C) $65.00
D) $69.58
E) $70.00