Question

Mr.O.B.Kandle will live for only two periods .In the first period he will earn $100,000. In the second period he will retire and live on his savings. Mr. Kandle has a Cobb-Douglas utility function U(c1, c2) = c21c2, where c1 is his period 1 consumption and c2 is his period 2 consumption. The real interest rate is r.

Answer 1

The change in the interest rate won't affect his saving.