Investor X has $200,000 available in period 0 (now) to support consumption in periods 0 (now) and 1 (next year). He wants to consume exactly the same amount in each period. The interest rate is 8% and there is no uncertainty.

a. How much should he invest, and how much can he consume in each period?

b. How does the answer to (a.) change if the interest rate is 10%?

c. Provide an economic interpretation of the difference in the results in (a.) and (b.).