Question
Q1. Your employer uses a flat benefit formula to determine retirement payments to its employees. The fund pays an annual benefit of $2,500 per year
Q1. Your employer uses a flat benefit formula to determine retirement payments to its
employees. The fund pays an annual benefit of $2,500 per year of service. Calculate
your annual benefit payment for 25, 28 and 30 years of service.
Q2. Your company sponsors a 401(k) plan into which our deposit 12 percent of your
$60,000 annual income. Your company matches 50 percent of the first 5 percent of
your earnings. You expect the fund to yield 10 percent next year. If you are currently
in the 31 percent tax bracket, what is your annual investment in the 401(k) plan and
your one-year return?
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