Question: Holly's utility function is U(c1, c2) =c1/21+ 0.87c1/22, where c1 is her consumption in period 1 and c2 is her consumption in period 2. In

Holly's utility function is U(c1, c2) =c1/21+ 0.87c1/22, where c1 is her consumption in period 1 and c2 is her consumption in period 2. In period 2, her income is twice as large as her income in period 1. At what interest rate will she choose to consume the same amount in period 2 as in period 1? Please show full working and explanations.

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