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Consider yourself a financial advisor. Your client is 25 years old, and wishes to retire in 40 years and die at age 85. She will begin her retirement savings plan with a one-time deposit of $50,000, and she would like to leave a donation of $100,000 to charity at the time of her death. You advice that she make annual contributions to her retirement account, and estimate that her real labor income will be $75,000 p.a. Her goal is to maintain a constant level of real consumption spending throughout her lifetime. The expected return on her retirement account is 5% apr. What is teh value of her human capital? What is the level of her permanent income? How much will she set aside each year to achieve her retirement goal? What is the level of her consumption spending p.a.?

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