As an economist working for the Minnesota Department of Natural Resources, you determined the state will collect $15 million in timber sale revenue in 2012. Assuming inflation is projected at 3.25 percent per year over the next 15 years:
1. What is the nominal value of the 2012 timber sale revenue 15 years from now, assuming the state will invest this revenue in a savings account that earns 7 percent nominal return per year? 2.What is the real (inflation adjusted) value of the 2012 timber sale revenue 15 years from now?