Hector's Wealth Is Zero,he Expects to Work for Another 45

question 66

Multiple Choice

Hector's wealth is zero,he expects to work for another 45 years at a constant salary of ?$80 000 and live for another 60 years.Yearly taxes are $20 000,and Hector received a one-time tax rebate of $5000 during his first year of work.If Hector completely smooths consumption over his lifetime,he will save ________ of the tax rebate during his first year of work.

• A) $1250.00
• B) $2666.67
• C) $3750.00
• D) $4916.67