Question
3. (10%) Lara Beal has $8,000 in cash now. She can lend and borrow at the bank at 10 percent per period. Her only investment
3. (10%) Lara Beal has $8,000 in cash now. She can lend and borrow at the bank at 10 percent per period. Her only investment possibility other than the bank is a project that costs $4,500 now in her Youth and has a payoff of $5,000 in cash one period from now in her Old Age.
1) What is the most she can consume in her Old Age?
) What is the most she can consume now?
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Foundations Of Finance
Authors: Arthur J Keown, John D Martin, J William Petty
7th Edition
0133370356, 9780133370355
