An individual has an income of $4,000 in period 0 and $0 in period 1. The individual has the potential investment opportunities given below:
At what market rates of interest would make the individual indifferent between (1) all consumption in Period 0 and none in Period 1 and (2) no consumption in Period 0 and all consumption in Period 1?

Question

An individual has an income of $4,000 in period 0 and $0 in period 1. The individual has the potential investment opportunities given below:
  At what market rates of interest would make the individual indifferent between (1) all consumption in Period 0 and none in Period 1 and (2) no consumption in Period 0 and all consumption in Period 1?

Quizplus · Accepted Answer

The Answer of An individual has an income of $4,000 in period 0 and $0 in period 1. The individual has the potential investment opportunities given below:
  At what market rates of interest would make the individual indifferent between (1) all consumption in Period 0 and none in Period 1 and (2) no consumption in Period 0 and all consumption in Period 1?

An Individual Has an Income of $4,000 in Period 0