1. Imagine a bye-gone era, when the Portuguese currency was the escudo and the Spanish currency the peseta. Now, assume a Spanish tourist plans to vacation in Portugal in one year. The tour package is currently priced at Portuguese escudo 200,000, and the current exchange rate is Portuguese escudo (Esc) 1.25 per Spanish peseta (Pta). The annual inflation rate in Spain is expected to equal 6 percent and in Portugal 8 percent during the coming year. What will the Spanish Peseta cost of the vacation equal in one year, assuming that all parity conditions and the law of one price are satisfied between Portugal and Spain (using discrete calculations)?