#2: Consider an employee who has 20 years of service at your company and is considering retirement sometime in the next 10 years. As an employer, you use a final pay formula by which the employee receives an annual benefit payment of 4 percent of her average salary over the last three years of service times the number of years employed. Calculate the annual benefit if she retires now, in 2 years, 5 years, 8 years, and 10 years, using the estimated annual salary during the last three years of service listed below.

Retire...... Average Salary

Now....... $50,000

In 2 years..... 51,005

In 5 years ....... 52,551

In 8 years...... 54,143

In 10 years...... 55,231