A bank offers a savings account with a 6% annual interest rate. If the expected inflation rate is 2.5%, what is the true (real) rate of return on the savings?

An engineer estimates that a piece of equipment will cost $50,000 to replace in today's dollars. The replacement will occur in 5 years. If the general inflation rate is expected to be 4% per year, what will be the actual dollar cost of the equipment when it is purchased?