Pulau Penang Island Resort. Theresa Nunn is planning a 30-day vacation on Pulau Penang, Malaysia, one year from now. The present charge for a luxury suite plus meals in Malaysian ringgit (RM) is RM1,000/day. The Malaysian ringgit presently trades at RM5.2522/GBP.

She determines that the pound cost today for a 30-day stay would be about GBP6,000. The hotel informs her that any increase in its room charges will be limited to an increase in the Malaysian cost of living. Malaysian inflation is expected to be 3% per annum, while U.K.
inflation is expected to be 1%.

a. How many pounds might Theresa expect to need one year hence to pay for her 30-day vacation?

b. By what percent will the pound cost have gone up?
Why?