29.8 Everyday and Policy Application: Impatient versus Present-Biased Students: In exercise 29.7, we considered how low “teaser” interest rates impact borrowing when college students are present-biased.

We now consider the difference in borrowing responses to such teaser rates by impatient versus presentbiased students.

A. Throughout, compare an impatient student without present-bias to a present-biased student assuming both consume (and therefore borrow) the same amount in their junior year. Assume throughout that no credit card offers are made prior to the junior year.