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Expected income: 850 000 per year before tax (Assume for simplicity that the full amount is paid one year from today. ) Tax rate: 42%
Expected income: 850 000 per year before tax
(Assume for simplicity that the full amount is paid one year from today. )
Tax rate: 42%
Working time: 40 years
Wage growth: 3% annually
The required rate of return: 5% annually
Necessary consumption: 60% of income after tax
How much is this person's human capital from today until retirement (40 years)?
(Make your own assumptions if anything appears unclear)
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