Question: Your annual income is $45,000 this year and you expect this to increase by 5% next year. The interest rate is 7.5%. You believe that

Your annual income is $45,000 this year and you expect this to increase by 5% next year. The interest rate is 7.5%. You believe that your consumption this year and next year should be the same. If you in fact do consume equally in those two years, how much should you save or borrow this year?

	You should save $2,813 this year.
	You should save $2,587 this year.
	You should save $1,084 this year.
	You should borrow $1,084 this year.

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