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

question 69

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 an unexpected $20 000 increase in salary his first year of work and he completely smooths consumption over his lifetime,his annual consumption is

• A) $67 500.
• B) $75 000.
• C) $80 000.
• D) $111 111.

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Definitions:

Continental Army

The revolutionary war army authorized by the Continental Congress in 1775, led by General George Washington, to fight against British rule during the American Revolution.

Declaration of Independence

A seminal document adopted on July 4, 1776, by the thirteen American colonies declaring their independence from British rule.

Treaty of Paris

The 1783 agreement that ended the Revolutionary War, recognizing American independence and granting significant land territories to the United States from Great Britain.