Dr. Farida is planning for her requirement. Suppose she can consume her salary of Rs. 100,000 while she is in service or save her salary to consume it after retirement. When she saves her salary she will get 10% interest on it. Draw Dr. Farida’s budget constraint, her indifference curve and her optimum. If interest rate goes up to 20%, draw figures to show when she will save more and when she will save less.

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