uestion #$5$: Assume that you are $25$ years old today, with zero financial capital and

no debt. You plan to spend the next year travelling around the world. $($All costs paid

by your parents.$)$ Then, at age $26$ exactly you will get your first full$-$time job earning a

base rate of $$60,000$ per year $($after$-$ tax$)$ paid annually until the age of $30.$ During those

first $4$ working years, you will get a raise of $2\%$ per year. At age $30$ you plan to return

to graduate school and get an advanced degree. This degree will take you two years

to complete and cost $$50,000$ up$-$front each of the two years. When you graduate at

the age of $32,$ you will return to the labor force and earn a base rate of $$120,000$ per

year $($after$-$tax$)$ which will then increase by $3\%$ each year until you retire at age $65.$

Part A: What is the value of your gross human capital $($ignoring implicit liabilities$)$ today

assuming a $4\%$ valuation $($interest$,$ investment$)$ rate, at age $25?$

Part B: What is your optimal $($flat$)$ consumption amount starting from today $($age $25),$

assuming you plan to live to $95?$ Make and state any assumptions.

Part C: What is your savings rate in your last working year, at age $64?$

Part D: What will be the value of your financial ca