= 3. (15 points) Edna lives for five periods and received the following stream of disposable income: y = 20, y2 = 40, y3 = 70, y4 = 60, and ys = 10. The real interest rate is ten percent in all five periods. a. Calculate the PDV of Edna's disposable income; round your numbers to two decimal points. Your time series should look similar to the graph on slide 21 in Lecture 6. b. According to the principle of consumption smoothing and the Permanent Income Hypothesis, what should Edna's level of consumption be in each of the five periods? Explain, and plot the consumption time series on the same graph as above. c. In which period(s) of her life is Edna a saver? A borrower? Explain. = 3. (15 points) Edna lives for five periods and received the following stream of disposable income: y = 20, y2 = 40, y3 = 70, y4 = 60, and ys = 10. The real interest rate is ten percent in all five periods. a. Calculate the PDV of Edna's disposable income; round your numbers to two decimal points. Your time series should look similar to the graph on slide 21 in Lecture 6. b. According to the principle of consumption smoothing and the Permanent Income Hypothesis, what should Edna's level of consumption be in each of the five periods? Explain, and plot the consumption time series on the same graph as above. c. In which period(s) of her life is Edna a saver? A borrower? Explain