Q$7.$ Buster$$s Badminton Bazaar produces high performance Badminton racquets. The current price of a racquet is $$240.$ Busters expects that, for the indefinite future, the racquet price will rise only by the inflation rate, which is expected to be one percent per year.

Answer:

a$.$ What will the nominal racquet price be in five years?

b$.$ What will the nominal racquet price be in fifty years?

c$.$ Suppose that Buster$$s expects to sell $3,000$ racquets next year, and the same number each subsequent year for the next fifty years. If the nominal interest rate is $6\%,$ what is the present value of Buster$$s expected sales revenue from the racquets?