Movie Ticket Today - 1/1/2020 $12.34 Effective Monthly Nominal Interest Rate Monthly Inflation 0.2500% 0.2000% a) b) Ticket price in 1/1/2030 Saving today needed to buy 10 tickets in the future c) Price today of the super ticket #1 d) Price today of the super ticket #2 d) Price today of the saving plan Question 1: (40 points) Assume the following: For this exercise, today is 1/1/2020. An average movie ticket costs $12.34 today. The effective monthly nominal interest rate is 0.25%. If I save in a bank, this is the nominal interest rate I am going to earn. CPI rises by 0.2% every month in the U.S. This is the pace at which the price of a movie ticket rises. Perpetuities of money and movie tickets are valuable to you because others can inherit them from you. Expand your cell to show 4 decimal places (e.g., $12.4567). a. (5 points) Taking inflation into account, what is the expected nominal price of a movie ticket in 1/1/2030? b. (5 points) How much do I have to save in the bank today, so that my bank account in 1/1/2030 is exactly enough to offer 10 tickets? c. (10 points) The movie theatre offers you a super ticket, which allows you to get a movie ticket every January 1st starting from today (1/1/2020) until 1/1/2030. So you will receive 11 tickets in total, one in each year. What is the present value of this super ticket today? d. (10 points) The movie theatre offers you another super ticket, which allows you to get a movie ticket every January 1st starting from today (1/1/2020). So this is an infinite stream of movie tickets. What is the present value of this super ticket today? e. (10 points) The movie theatre also offers you a saving plan, which gives you a fixed $5 credit every January 1st starting from today (1/1/2020) until 2030. So you will receive 11 payments in total. What is the present value of this saving plan today?