Hector's Wealth Is Zero,he Expects to Work for Another 45

Multiple Choice

Hector's wealth is zero,he expects to work for another 45 years at a constant salary of ?$80 000 and live for another 60 years.Yearly taxes are $20 000,and Hector received a one-time tax rebate of $5000 during his first year of work.Shortly after the tax rebate is announced,the government unexpectedly announces that the one-time tax rebate will actually become a permanent tax reduction.If Hector completely smooths consumption over his lifetime,his annual consumption will increase by ________ due to the tax rebate becoming permanent in the following year.

A) $2733.33
B) $3666.67
C) $3750.00
D) $5000.00