Mr$.$ Art Deco will be paid $$120,000$ one year hence. This is a nominal flow, which he discounts at an $10\%$ nominal discount rate:Mr$.$ Art Deco will be paid $$120,000$ one year hence. This is a nominal flow, which he discounts at an $10\%$ nominal discount rate:

$PV=$$$120,0001\mathrm{.}10=$$$109,091$

The inflation rate is $3\%.$

Calculate the PV of Mr$.$ Deco's payment using the equivalent real cash flow and real discount rate.

Note: Do not round intermediate calculations. Round your "Real cash flow" and "Present value" answers to the nearest

whole dollar amount. Enter the "Real discount rate" as a percent rounded to $3$ decimal places.

$PV=$$$120,0001\mathrm{.}10=$$$109,091$

The inflation rate is $3\%.$