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

question 4

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.Assuming taxes are zero,if Hector receives a $20 000 bonus during his first year of work and he completely smooths consumption over his lifetime,his annual consumption is

• A) $60 000.
• B) $60 333.
• C) $80 444.
• D) $107 000.