5 Suppose Tom is 20 years old. He works till 50 yearsold, retire, and live up to 80 years old.Tom knows his income will be $2000/monthbtweeen 20 and 40, then he knows he will bepromoted at 40 yo and receives an income of$4000/month (til he retires at 50 yo).age 40, unfortunately, Tom's job has beenreplaced by Al, leaving Tom permanentlyunemployed. (assume there's no unemploymentbenefit or any social assistance).AtIf beta=1 and i=0%, then Tom's month spending =$______/month between age 40 and 50.

The notion of the time value of money (TVM) is concerned with money's purchasing power capability,…

Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old. Tom knows his income will be $2000/month btweeen 20 and 40, then he knows he will be promoted at 40 yo and receives an income of $4000/month (til he retires at 50 yo). At age 40, unfortunately, Tom's job has been replaced by Al, leaving Tom permanently unemployed. (assume there's no unemployment benefit or any social assistance). If beta=1 and i=0%, then Tom's month spending = $______/month between age 40 and 50.