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17. Mr. Thomas has $210 income this year and $180 income next year. The market interest rate...

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Finance

17.

Mr. Thomas has $210 income this year and $180 income next year.The market interest rate is 5% per year. Mr. Thomas also has aninvestment opportunity in which he can invest $70 this year andreceive $90 next year. Suppose Mr. Thomas consumes $90 this yearand invests in the project. What will be his consumption nextyear?

$300

$358

$300

$322

Answer & Explanation Solved by verified expert
4.3 Ratings (775 Votes)
Mr Thomas has 210 income this year and he consumes 90 this year Therefore money left with Mr Thomas for investment this year Income this year consumption this year 210    See Answer
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Transcribed Image Text

17.Mr. Thomas has $210 income this year and $180 income next year.The market interest rate is 5% per year. Mr. Thomas also has aninvestment opportunity in which he can invest $70 this year andreceive $90 next year. Suppose Mr. Thomas consumes $90 this yearand invests in the project. What will be his consumption nextyear?$300$358$300$322

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