You live 2 periods. You are born with nothing and you must die with nothing. In period 1 you only have labor income (Li1) In period 2 you have labor income (Li2) and any savings from period 1 (S) and the interest on that savings i*S. In both periods you may consume C1 and C2.

1. Write out period 1's budget constraint using the notations above (C1 C2 Li1 Li2 S and i)

2.Write out period 2's budget constraint using the notations above (C1 C2 Li1 Li2 S and i)

3.Derive the 2 period budget constraint.