Mr bird has 120 income this year and zero income next year


Mr. Bird has $120 income this year and zero income next year. The market interest rate is 10% per year. Mr. Bird also has an investment opportunity in which he can invest $60 today and receive $90 next year. Suppose Mr. Bird consumes $40 this year and invests in the project. What will be his consumption next year?

Solution Preview :

Prepared by a verified Expert
Macroeconomics: Mr bird has 120 income this year and zero income next year
Reference No:- TGS01464028

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)