Real and nominal interest rates Z currently has $ 100 that he can spend on shirts that cost $ 25 each. Alternatively, you could invest the $ 100 in a risk-free US Treasury security that is expected to earn a nominal interest rate of 9%. The consensus forecast by economists on the inflation rate is 5% for the following year. to. How many shirts can Z buy today? b. How much money will Z have at the end of 1 year if he does not purchase the shirts today? Principal + (Time in years + Interest%) ^ 1 x Principal c. How much do you think shirts will cost at the end of the first year in light of expected inflation? Cost of shirts today x (1 +% inflation) d. Use the calculations in parts b) and c) to determine how many shirts (including shirt fractions) Z will be able to buy at the end of the first year. In percentage terms, how many more or fewer shirts will Z be able to buy at the end of the first year? Money at the end of the year = result you obtained in exercise b. Cost per shirt = result obtained in exercise c. With these two data, how many shirts will he be able to buy at the end of the first year? Percentage terms (Number of shirts you can buy - The difference between the nominal interest rate and the inflation rate) / 4 * 100