Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old. While working, Tom's job pays a month income of $2000/month. There's no income or pension after retirement. (Also ignore any medical expense or existing debt). If beta=1 and i=0%, then Tom's month spending = $______/month. Hint: you can calculate how many years Tom will be earning the income, and how many years Tom need to spend the income.
Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old. While working, Tom's job pays a month income of $2000/month. There's no income or pension after retirement. (Also ignore any medical expense or existing debt). If beta=1 and i=0%, then Tom's month spending = $______/month. Hint: you can calculate how many years Tom will be earning the income, and how many years Tom need to spend the income.
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: The Basic Tools Of Finance
Section9.1: Present Value: Measuring The Time Value Of Money
Problem 1QQ
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Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old.
While working, Tom's job pays a month income of $2000/month. There's no income or pension after retirement. (Also ignore any medical expense or existing debt).
If beta=1 and i=0%, then Tom's month spending = $______/month.
Hint: you can calculate how many years Tom will be earning the income, and how many years Tom need to spend the income.
Expert Solution
Step 1
The age of tom = 20 years
Total working-age = 50 -20 = 30 years
Total not working age = 80 - 50 = 30 years
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