1. Present value and future value.
a. Assume the interest rate is equal 10%. Let the initial capital (at the beginning of present period : t = 0, Ko) be 75$. Calculate the (future) value K4 = FV(Ko) (of capital at the beginning of 4-th period)
b. Assume the interest rate is equal 20%. Let capital K 4 (at the beginning of the 4-th period (t = 4) be 100 $. Calculate the present value Ko = PV(K4) (of capital at the beginning of 0-th period)
c. Calculate the PV( S) of finite stream of flows S=(40, 50,60,70,80) occurring at the beginnings of periods 0,1,2,3,4 when interest rate r= 0.2.
2. Determining inter-temporal budget constraint, when real (external) interest rate is r >0 (r =0.1), and initial recourses (stream of incomes in two periods, respectively) is (X,Y) = (30,40)
3. Calculate elasticity of function f(x) = x -3 at point x = 8.

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