Suppose that the value function of a household is defined as

V(k) =c^{(1 - )}/(1 - )

where c = 0.2k and = 2.

(a) Define a linearly spaced kgrid k [0.1, 2.0] with Nk = 10 points.

(b) Evaluate V(k) on kgrid.

(c) Calculate the value of V(0.5) and V(1.75) using the piecewise linear interpolation

method.

using Matlab