Bernard Lewis has $30,000 in cash and expects to receive a salary of $55,000 in one year. The market interest rate is 10% p.a.

An investment in a business venture requires an outflow of $23,500 today and promises to pay off $40,150 in one year. he wants to spend $10,000 today on a down payment on a car and other consumption and he has only $30,000 in hand.

If his optimal consumption is to spend $10,000 now and the rest in one year how much will he be able to spend in one year without the project? With the project?