Solution-Determining the annual consumption

Determining the annual consumption

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Reference no: EM131082601

Bob is 18 years old now, and will be taking a 5 year university degree. The degree will cost him $25000 a year for 5 years. When he is finished he expects to make $50,000 per year for 10 years, then $75000 per year for another 10 years, and then $100000 per year for the final 10 years of his working career. If Bob lives to be 100, and if the real interest rate stays at 5% throughout his life, what is the equal annual consumption he could enjoy until he is 100?

Reference no: EM131082601

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Determining the annual consumption

Reference no: EM131082601

Reference no: EM131082601

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