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Rebecca is currently 30 years old and plans to retire at the age of 70 and live to 90. Her labour income is $60,000 per
Rebecca is currently 30 years old and plans to retire at the age of 70 and live to 90. Her labour income is $60,000 per year and she intends to maintain a constant level of real consumption over the next 60 years. The real interest rate is 4 percent per year and there are no taxes and no growth in her real labour income. What is the approximate present value of her human capital on her 30 th birthday ? What is the approximate value of her permanent income? If the real interest rate is increases from 4 percentto 5 percent then the value of her human capital will be approximately? If the real interest rate is increases from 4 percentto 5 percent then the value of her permanent income will be approximately
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