A consumer's income in the current period is y1=100, and income in the future period is y2=140. The real interest rate is 0.1, or 10%, per period.

Determine optimal consumption in the current and future periods.

A) c1=130.45; c2=130.45

B) c1=115.55; c2=115.55

C) c1=130.45; c2=115.55

D) c1=115.55; c2=130.45

Consider your answer from the previous question, is the consumer a lender or a borrower?

A) Lender

B) Borrower

C) None

D) Not possible to determine