You will receive $100 from a savings bond in 3 years. The nominal interest rate is 8.9%.

a.What is the present value of the proceeds from the bond?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value $ ________

b.If the inflation rate over the next few years is expected to be 3.9%, what will the real value of the $100 payoff be in terms of today's dollars?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Real value $ ________

c.What is the real interest rate?(Do not round intermediate calculations. Round your answer to 3 decimal places.)

Real interest rate%_______

d.Show that the real payoff from the bond [from part (b)] discounted at the real interest rate [from part (c)] gives the same present value for the bond as you found in part (a).(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value $ _______