Daily exercise 1 for 10/28

An individual is concerned about consumption in two periods: 0 and 1. In period 0, she works and has an income of $180,000. In period 1, she expects to be retired and receiving a pension of $60,000. She would like to have 2 units of consumption in period 0 for each unit in period 1, and she can borrow or save at an interest rate of 20 percent.

1. Please calculate how much she consumes in each period and determine the amount she borrows or saves in period 0.
2. Illustrate your results with an appropriate diagram showing her intertemporal budget constraint, an indifference curve, her equilibrium, and the amount of borrowing or saving.

Please scan and upload your answer.