Cindy Arellas godmother just left her an inheritance of $100,000. Cindy will receive a payment of $100,000 when she turns 21, which will be in 8 years.

The nominal interest rate is 4% per year, and the inflation rate is expected to be 1% per year.

a. Calculate the present value of Cindys inheritance using nominal cash flows

c. Calculate the present value of Cindys inheritance using real cash flows

Show your work, step by step.