Sara works for the City of Northbeck. The city calculates an employee's pension according to the following formula.
• Determine the average of the highest 3 years of annual earnings.
• Determine the monthly average using the above amount.
• Subtract $600 from that amount.
• Multiply the result by 30%.
• Add $400 to that result.
• For each year of employment over 15 years, add 1% of the average monthly salary, not to exceed $100 for each year.
• The final result is the monthly pension benefit.
Sara's three highest annual salaries are $90,000, $92,598, and $93,000. Calculate Sara's monthly pension benefit to the nearest penny if she retires after 18 years of employment.
First 15 years of service Service in Excess of 15 years
2.12% multiplier ................................................ 2.25% multiplier
Years of service up to 15 ..................... years of service in excess of 15
Average of final 3 annual salaries .......... Average of final 3 annual salaries