Show full solution, Do not use Excel Spreadsheet, Draw cashflow diagrams where applicable

2. What is the amount of the annuity D' in constant dollars (today's dollars) that is equivalent to the annual amount of $1,111.06 in actual dollars. The annual general inflation rate is 3.78% and a real interest rate is 6%? (6 Marks) D' = ? in constant dollars today's dollars) 0 1 b) 2 3 4 5 D = $1111.06 in actual dollars