Charlie belongs to a defined benefit pension plan that offers a pension of 2% of best earnings foreach year of service, commencing at age 65. However, Charlie would like to retire at age 55, with 20years of service and best average earnings of $68,000. His plan does allow early retirement, with astandard reduction of 4% for each year of early retirement. What will Charlie's pension entitlementbe if he chooses to retire at age 55?12O a) $16,320O b) $24,480O c) $26,112O d) $27,200

The answer for the above case study is option b) $ 24,480 Detail attached below:

Answered: narlie belongs to a det ach year of…

Business

Accounting

narlie belongs to a det ach year of service, ca cars of service and bes andard reduction of 4 eif he chooses to retir

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Charlie belongs to a defined benefit pension plan that offers a pension of 2% of best earnings for
each year of service, commencing at age 65. However, Charlie would like to retire at age 55, with 20
years of service and best average earnings of $68,000. His plan does allow early retirement, with a
standard reduction of 4% for each year of early retirement. What will Charlie's pension entitlement
be if he chooses to retire at age 55?
12
O a) $16,320
O b) $24,480
O c) $26,112
O d) $27,200

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