Mr$.$ Art Deco will be paid $$180,000$ one year hence. This is a nominal flow, which he discounts at an $7\%$ nominal discount rate:

PV $=$ $$180,000-$: $1\mathrm{.}07=$ $$168,224$

The inflation rate is $4\%.$

Calculate the PV of Mr$.$ Deco$$s payment using the equivalent real cash flow and real discount rate.

Real Discount Rate$=\%$

Present value$=$$