In a Two-Period Model, a Household Has an Income of $20,000

Multiple Choice

In a two-period model, a household has an income of $20,000 in period one and an income of $25,000 in period two. The household faces an interest rate of 50 percent.What is the present value of the household's income if the income in period one increases to $30,000?

A) ​$39,000
B) ​$46,666.66
C) ​$40,555.65
D) ​$50,000