When you begin your new job, your employer says they will match any 401k deposits you make by 50% up to 5% of your overall salary annually. When you start your new job as a college grad, you will make $57600 per year and you decide to take full advantage of the matching by depositing 5% of your monthly salary every month. a) How much will YOU be depositing in the 401k each month from your salary? $240 b) How much will YOUR EMPLOYER be depositingin the 401k each month? $ 120 c) How much TOTAL will be deposited into your 401k each month? $360 d) How much will you have in the account in 45 years if it pays 7.8% APR? e) How much total money will you put into the account after 45 years? $ f) How much total will the employer have put into the account after 45 years? g) How much total interest will you earn? h) If you choose NOT to take advantage of depositing money into the 401k because you feel you need that money to pay bills now, how much money will you be losing from your employer and interest over the 45 years?
When you begin your new job, your employer says they will match any 401k deposits you make by 50% up to 5% of your overall salary annually. When you start your new job as a college grad, you will make $57600 per year and you decide to take full advantage of the matching by depositing 5% of your monthly salary every month. a) How much will YOU be depositing in the 401k each month from your salary? $240 b) How much will YOUR EMPLOYER be depositingin the 401k each month? $ 120 c) How much TOTAL will be deposited into your 401k each month? $360 d) How much will you have in the account in 45 years if it pays 7.8% APR? e) How much total money will you put into the account after 45 years? $ f) How much total will the employer have put into the account after 45 years? g) How much total interest will you earn? h) If you choose NOT to take advantage of depositing money into the 401k because you feel you need that money to pay bills now, how much money will you be losing from your employer and interest over the 45 years?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 6E
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Transcribed Image Text:When you begin your new job, your employer says they will match any 401k deposits you make by 50% up to
5% of your overall salary annually. When you start your new job as a college grad, you will make $57600 per
year and you decide to take full advantage of the matching by depositing 5% of your monthly salary every
month.
a) How much will YOU be depositing in the 401k each month from your salary?
$ 240
b) How much will YOUR EMPLOYER be depositingin the 401k each month?
$ 120
c) How much TOTAL will be deposited into your 401k each month?
$360
d) How much will you have in the account in 45 years if it pays 7.8% APR?
$
e) How much total money will you put into the account after 45 years?
$
f) How much total will the employer have put into the account after 45 years?
$
g) How much total interest will you earn?
$
h) If you choose NOT to take advantage of depositing money into the 401k because you feel you need that
money to pay bills now, how much money will you be losing from your employer and interest over the 45
years?
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