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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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