2. Suppose you'll have an annual nominal income of $30,000 for each of the next three years,

and the inflation rate is 5 percent per year.

(a)Find the real value of your $30,000 salary for each of the next three years.

(b) If you have a COLA in your contract, and the inflation rate is 5 percent, what is the

real value of your salary for each year?