Question 2 OLG
L(Gu) hire o> 9
Ul) = In Cy) as aun), Where 9> 9
max — In(Gy)+ + In Cops)
IS
Pata
GC's in two Parody:
Jeb, vhan yang, C545 ety, MO oot ot -
Ae tatyuitya old > Gan = C144.) St
Suostivic. Ca,t ond Guay io the abs func. Using, the B.C'5.
In (wy-5p) + LE An (U4). 5
me a( Wy Ot n( Alin) 1)
FO. =! 4 1. ele
w-st bp St
Solve the F.9-C for St:
atti by LUM
5, 4p) 4 uy SpE O
2) Sabiek Wk (120 both Sides:
$4 Cap) +4 “HW = OW
SRecuronge, to get,
SHC P )-Sp= Wt
20
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AP St SESE = TW
APSE DS = “Wy
Factor out LIS:
- (+2) = WE
Divide bon sides by — (942
Ge VE] SP? Sovings do nat dependl on the interest (ate here.
pau because, we agplita the diftectiaton we:
\
(lolubo)]! = L.. ulCx) thus losing the Hi
ulx) port.
When tility loqecthinic, the, optinal Saving, dept on the Uae but not
on the interest forctors The Cason is that ty income effeck ond thy Sbsthtins
Affect of On incleaye in the interest fachay On Sov Oftsck each athy tay
Woke:
}) Fins ‘
ie toi ota Ha cenay ot He fc
yer ¥ Noung gta Chom at +) cae=Clag) Sh
pe \I
2h Yd tn Cio 4) TP | BR a |
I ye BREA whe 4 elln)L
ws Niu LoL
gay “Be =a Ly tH Ge Lt 4 Lp Xe(htty
Using the foctor pies Ctay)s
2
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VA) = \n(ay) + a.” ln Cox )
hy
oP \ t
mox N42. ( rts | yl]
uy
XK
Fl)
MX (ae; lal en) (ir) {ole * a nls) |
[
“(geo ms)
sg. +f [-,)o' we lara) | ti
ara Vet
Hing Uy a F(lala | Rata Ge? Lat bt
Conht oat
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(ne he + Sle
Bay By = Seb stg Si4.by)
Way See = (late) (ee Salys)
Year = CH) Xt
elvan) Lt, dlvide. 9 Lyy (bath se)
3 2S. oad Ln
to LE 3 a(t)
aM Ue
Van = - (Wy (un)
et [At wy oA. sain |
4) 04 hn Akay 2 | ~ Regvirentinh f¢ a stable SS.
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N
mex AL'S 2 Yigal = 2 15
fl i
Of: Cordis
ee
OG 1
Xij 3 Li (34) “
OF aywel(ba) We
OY a
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