Yuanyuan Qian can lend and borrow at the bank at 25 percent per period. She has (a) €20,000 in cash now. Her only investment possibility costs €32,000 now in her Youth and has a payoff of €50,000 in her Old Age. What is the most she can consume in her Youth?

Yuanyuan Qian can lend and borrow at the bank at 25 percent per period. She has (a) €20,000 in cash now. Her only investment possibility costs €32,000 now in her Youth and has a payoff of €50,000 in her Old Age. What is the most she can consume in her Youth?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Yuanyuan Qian can lend and borrow at the bank at 25
percent per period. She has (a) €20,000 in cash now. Her
only investment possibility costs €32,000 now in her Youth
and has a payoff of €50,000 in her Old Age. What is the
most she can consume in her Youth?

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