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An employee contributes $15,300 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,530. The employee can allocate
An employee contributes $15,300 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,530. The employee can allocate the contributions among equities (earning 13 percent annually), bonds (earning 4 percent annually), and money market securities (earning 2 percent annually). The employee expects to work at the company 15 years. The employee can contribute annually along one of the three following patterns: Option 1 60% 40 Option 2 50% Option 3 40% Equities Bonds Money market securities 45 50 10 100% 100% 100% Calculate the terminal value of the 401(k) plan for each of the 3 options, assuming all returns and contributions remain constant over the 15 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32)) Option 1 Option 2 Option 3
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