Chris is a student at the University. He has an endowment of K2000 kwacha per month in period one and it is expected to increase to care K20 000 per month after he completed his studies. The loan and scholarship board has agreed to lend him money of K3000 every month which will enable Chris to increase his consumption to K5000 every month i) Calculate how much monthly consumption that Chris will be able to afford once he is done with his university studies? ii)Assume that the loan and scholarship board decided to charge interest of 5% and Chris chooses to remain a borrower, how will it affect Chris's monthly consumption in period two iii)Draw Chris's indifference Curve together we the intemporal budget constraint that shows his endowments, optimising outcomes in both period as depicted in (ii)
Chris is a student at the University. He has an endowment of K2000 kwacha per month in period one and it is expected to increase to care K20 000 per month after he completed his studies. The loan and scholarship board has agreed to lend him money of K3000 every month which will enable Chris to increase his consumption to K5000 every month
i) Calculate how much monthly consumption that Chris will be able to afford once he is done with his university studies?
ii)Assume that the loan and scholarship board decided to charge interest of 5% and Chris chooses to remain a borrower, how will it affect Chris's monthly consumption in period two
iii)Draw Chris's indifference Curve together we the intemporal budget constraint that shows his endowments, optimising outcomes in both period as depicted in (ii)
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