You will receive $100 from a savings bond in 3 years. The nominal interest rate is 8%.

a. What is the present value of the proceeds from the bond? (Do not round intermediate calculations. Round your final answer to nearest cent.)

PV of the proceeds from the bond

$

b. If the inflation rate over the next few years is expected to be 3%, what will the real value of the $100 payoff be in terms of today's dollars? (Do not round intermediate calculations. Round your final answer to nearest cent.)

The real value of the $100 payoff

$

c. What is the real interest rate? (Round your answer to 3 decimal places.)

The real interest rate

%

d. Show the real payoff from the bond in part (b), discounted at the real interest rate in part (c) gives the same present value for the bond as you found in part (a). (Do not round intermediate calculations. Round your final answer to nearest cent.)

PV of the real payoff from the bond

$