Question

Your employer provides a 401(k) plan with a matching contribution of 7% of your salary if you put…

Your employer provides a 401(k) plan with a matching contribution of 7% of your salary if you put in at least 5% of your salary. If your monthly salary is $2250 and you contribute just enough to get the match, then how much money will be added to your account in total over one year? Your Answer:

Solutions

Expert Solution

Answer:

Monthly Salary S=$2250

Employees Monthly Contribution =5%*2250=$112.5

Employer Monthly contribution =7%*2250=$157.5

Employees Annual Contribution =12*Employees Monthly
Contribution=$1350

Employer Annual contribution =12*Employer Monthly contribution
=$1890

Total money added in account in a year =Employees Annual
Contribution + Employer Annual contribution
=1350+1890=$3240


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