Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old.  While working, Tom's job pays a month income of $2000/month. There's no income or pension after retirement. (Also ignore any medical expense or existing debt).    At age 40, Tom gets promoted by surprise and his income goes up to $4000/month.    If beta=1 and i=0%, then Tom's month spending = $______/month between age 40 and 50.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old. 

While working, Tom's job pays a month income of $2000/month. There's no income or pension after retirement. (Also ignore any medical expense or existing debt). 

 

At age 40, Tom gets promoted by surprise and his income goes up to $4000/month. 

 

If beta=1 and i=0%, then Tom's month spending = $______/month between age 40 and 50. 

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