Question: The only help i require is finding optimal savings as a function of R. So what S(r)=...... Part B . You MUST answer this question

The only help i require is finding optimal savings as a function of R. So what S(r)=......

Part B . You MUST answer this question . ( 28 points ) 8 . ( 2 ) A consumer lives for two periods and has utility function ( C C 2 ) = ( C 213 02 13 where ( C . C2 ) is consumption during the two periods of life . The consumer earns Y in period I and saves S = Y - C in order to consume C2 - ( this in period 2 . The lifetime present value budget constraint is therefore at It COZY Calculate the consumer's optimal savings as a function of the interest rate . What is the interest elasticity of savings ? Explain your

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