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An employee contributes $17,000 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,700 The employee can allocate
An employee contributes $17,000 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,700 The employee can allocate the contributions among equities (earning 12 percent annually), bonds (earning 6 percent annually), and money market securities (earning 4 percent annually). The employee expects to work at the company 20 years. The employee can contribute annually along one of the three following patterns Option 1 70% 30 0 Option 2 60% 35 Option 3 50 Equities Bonds Money market securities 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 20 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32)) Answer is complete but not entirely correct. Option 1 Option 2 Option 3 $1,258,722 $1,204,836 $ 1,132,335 An employee contributes $17,000 to a 401(k) plan each year, and the company matches 10 percent of this annually, or $1,700 The employee can allocate the contributions among equities (earning 12 percent annually), bonds (earning 6 percent annually), and money market securities (earning 4 percent annually). The employee expects to work at the company 20 years. The employee can contribute annually along one of the three following patterns Option 1 70% 30 0 Option 2 60% 35 Option 3 50 Equities Bonds Money market securities 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 20 years. (Do not round intermediate calculations. Round your answers to the nearest whole number. (e.g., 32)) Answer is complete but not entirely correct. Option 1 Option 2 Option 3 $1,258,722 $1,204,836 $ 1,132,335
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