5. Interest, inflation, and purchasing power Suppose Rosa is a cinephile and buys only movie tickets. Rosa deposits $4,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixedthat is, it won't change over time. At the time of her deposit, a movie ticket is priced at $10.00. Initially, the purchasing power of Rosa's $4,000 deposit is C] movie tickets. For each of the annual ination rates given in the following table, first determine the new price of a movie ticket, assuming it rises at the rate of ination. Then enter the corresponding purchasing power of Rosa's deposit after one year in the rst row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest movie ticket. For example, if you find that the deposit will cover 20.7 movie tickets, you would round the purchasing power down to 20 movie tickets under the assumption that Rosa will not buy seven-tenths of a movie ticket. Annual Inflation Rate 09/0 50/0 80/0 remains the same Number of Tickets Rosa Can Purchase after One Year V V v _ _ _ falls Real Interest Rate l I l I l I rises When the rate of inflation is less than the interest rate on Rosa's deposit, the purchasing power of her deposit V over the course of the year