You have $100 that you can spend on coffee at Dunkin Donuts costing $3 each. The nominal interest rate on a 7 year deposit is currently 8%, and the expected rate of inflation over the coming year rs 5%.

How many coffees can you buy today?

If you waited one year, how much money would you have?

If you waited one year, how many coffees can you buy?

Did your buying power increase or decrease? If an increase, what is the percentage of increase? If a decrease, what is the percentage of the decrease?