Your father is 6 years away from retirement. He earns $90,000 per year. His wages are increasing by 2% per year. You may assume that your father is paid at the end of each year.

Your older sister just graduated from university. She is starting her career working for a major financial institution. She will be paid a salary of $75,000 per year to start. You may assume that your sister will be paid at the end of year 1. She expects her salary and other compensation to increase by 12% per year for the first ten years after she graduates. After year eleven, she expects her total compensation to increase by 3% per year thereafter. She plans on working for another 40 years.

The appropriate discount rate is 5%.

Part A: What is the value of your fathers human capital?

Part B: What is the value of your sisters human capital?