Suppose that after 20 years, you decide to attend your high school reunion and, by chance, run into an old friend who reminds you of a wager that you lost to her. Expecting immediate payment, she agrees to charge you no interest but asks that you compensate her for the loss of purchasing power caused by inflation. During the past 20 years, the average inflation rate was 5%. If the original wager was $150, what would you owe today? If you successfully argued that the average annual inflation was only 3.5% and not 5%, how much would you save?