Time value of money: This involves both simple and compound interest computations. Round to the nearest cent. Points: 2 27) Kerry and Andy Zell are retired and after saving their entire life, they have $280,000 in a savings account paying 3% compounded daily, use 365 days in a year. What is their gain or loss in purchasing power in a year in which inflation is 6%? Tip: Use simple interest process for the inflation portion of this problem. Compound interest for savings = Simple interest representing what is needed to keep up with inflation = Was there a gain or loss in purchasing power--the savings account is growing, but does it grow enough to keep up with inflation in this year?