4. Consider an individual who earns $10,000 this year, and is planning for her consumption needs this year, and the next two years. She has two investment projects open to her. The first project (project A) requires a $5000 investment, and yields returns of $4000 in each of the following two years. The second project (project B) requires the full $10,000, and pays off nothing until the third year, when a return of $14,000 is realized. (i) Assuming first that the individual cannot borrow or lend, list her consumption bundles under the three alternatives: don't invest, invest in project A, and invest in project B. (Hint: A consumption bundle is a vector with three components - (xi, r2, r3), where xt is her consumption in period t (ii) Suppose the interest rate at which the consumer can borrow and lend is 10% per annum Which of the three options- don't invest, invest in project A, or invest in project B- will she prefer (explain your answer)? (iii) If the interest rate is instead 20%, which option does she prefer? (iv) What if the interest rate increases to 40%? 4. Consider an individual who earns $10,000 this year, and is planning for her consumption needs this year, and the next two years. She has two investment projects open to her. The first project (project A) requires a $5000 investment, and yields returns of $4000 in each of the following two years. The second project (project B) requires the full $10,000, and pays off nothing until the third year, when a return of $14,000 is realized. (i) Assuming first that the individual cannot borrow or lend, list her consumption bundles under the three alternatives: don't invest, invest in project A, and invest in project B. (Hint: A consumption bundle is a vector with three components - (xi, r2, r3), where xt is her consumption in period t (ii) Suppose the interest rate at which the consumer can borrow and lend is 10% per annum Which of the three options- don't invest, invest in project A, or invest in project B- will she prefer (explain your answer)? (iii) If the interest rate is instead 20%, which option does she prefer? (iv) What if the interest rate increases to 40%