show your work completely but succinctly. While you are welcome (and encouraged) to work

together, your submission and writeup must be yours alone.

1. Suppose your bank account has a balance today of $100. Consider the following time periods: t = 0, t = 1,t = 2,t = 12,t = 24,t = 48,t = 60. (If you like, use a spreadsheet program to help you with these questions). ?(a) Compute your bank balance for these time periods assuming the interest rate is 1% (b) Do the same thing for an interest rate of 6% ?(c) Plot your bank balances for these two scenarios on a standard scale (d) Do the same thing with a ratio scale

2. Consider the basic Cobb-Douglas production function we used as the basis for our first model. Modify it to the more general form Y = A ?K?L1??

. (a) Write down the new model and identify specifically the: