At your first job you take advantage of an employer match program in which your employer will match up to 5% of your salary in a retirement savings plan if you also contribute 5%. Assume that your average salary over 5 years is $75,000, how much will you have saved in five years using a fund that pays 4% annual interest rate. Assume you only did 3% of your salary as retirement plan contribution. How much will you have in the fund, also 4%, after 5 years? Recalculate using a fund that pays 8%.
At your first job you take advantage of an employer match program in which your employer will match up to 5% of your salary in a retirement savings plan if you also contribute 5%. Assume that your average salary over 5 years is $75,000, how much will you have saved in five years using a fund that pays 4% annual interest rate. Assume you only did 3% of your salary as retirement plan contribution. How much will you have in the fund, also 4%, after 5 years? Recalculate using a fund that pays 8%.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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6. At your first job you take advantage of an employer match program in which your employer will match up to 5% of your salary in a retirement savings plan if you also contribute 5%. Assume that your average salary over 5 years is $75,000, how much will you have saved in five years using a fund that pays 4% annual interest rate. Assume you only did 3% of your salary as retirement plan contribution. How much will you have in the fund, also 4%, after 5 years? Recalculate using a fund that pays 8%.
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