An employer uses a final pay formula to determine retirement payouts to its employees. The annual payout is 5 percent of the average salary over the employees’ last three years of service times the total years employed. Calculate the annual benefit under the following scenarios.   Years Worked Average Salary during the Last Three Years of Service 17 $ 54,000 20 $ 61,000 22 $ 64,000

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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An employer uses a final pay formula to determine retirement payouts to its employees. The annual payout is 5 percent of the average salary over the employees’ last three years of service times the total years employed. Calculate the annual benefit under the following scenarios.
 

Years Worked Average Salary during the Last Three Years of Service
17 $ 54,000
20 $ 61,000
22 $ 64,000

 

 
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