1. A student 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 RM627/day. The Malaysian ringgit presently trades at RM3.1350/$. The student figures out the dollar cost today for a 30-day stay would be $6,000. The hotel announced that any increase in its room charges will be limited to any increase in the Malaysian cost of living. Malaysian inflation is expected to be 3.30% per annum, while U.S. inflation is expected to be only 1.20% per year. (a) How many dollars should the student expect to need one year hence to pay for the 30-day vacation? (b) By what percent will the dollar cost have gone up? Why?