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You just graduated and started your new job. Your starting salary is $80,000/year. Your employer's 401(k) plan states that your employer will contribute 2% of your salary to your 401(k) regardless of whether you make any contributions or not - this is called a "non-elective contribution". They will also match your contributions, $1-for $1, up to 6% of your salary. Please answer the following questions: How much ($) will your employer contribute to your 401(k) per year if you make $0 contributions? (this is a non-elective contribution from your employer) $ 1600 What is the minimum amount ($) that you must contribute per year to get the maximum match from your employer? $ 4800 Assume that you make the minimum contribution to get the maximum match from your employer. What is the total amount ($) that will be contributed to your 401(k) for the year, including the employer's non-elective contribution, the employer's matching contribution, and your contribution? $ 11200 Assume that this annual total contribution is made for 45 years and your 401(k) earns an average annual return of 6%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $2636056 After doing a budget, you realize that you can make a contribution of $4,000 per year to a Roth IRA, in addition to the total contributions to your 401(k) - including your employer's total contributions. Assuming the same annual rate of return and number of years to retirement as above, how much will you have in your accounts (4019k) and Roth IRA) when you retire? Assume Beginning of Period payments. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $3581240

You just graduated and started your new job. Your starting salary is $80,000/year. Your employer's 401(k) plan states that your employer will contribute 2% of your salary to your 401(k) regardless of whether you make any contributions or not - this is called a "non-elective contribution". They will also match your contributions, $1-for $1, up to 6% of your salary. Please answer the following questions: How much ($) will your employer contribute to your 401(k) per year if you make $0 contributions? (this is a non-elective contribution from your employer) $ 1600 What is the minimum amount ($) that you must contribute per year to get the maximum match from your employer? $ 4800 Assume that you make the minimum contribution to get the maximum match from your employer. What is the total amount ($) that will be contributed to your 401(k) for the year, including the employer's non-elective contribution, the employer's matching contribution, and your contribution? $ 11200 Assume that this annual total contribution is made for 45 years and your 401(k) earns an average annual return of 6%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $2636056 After doing a budget, you realize that you can make a contribution of $4,000 per year to a Roth IRA, in addition to the total contributions to your 401(k) - including your employer's total contributions. Assuming the same annual rate of return and number of years to retirement as above, how much will you have in your accounts (4019k) and Roth IRA) when you retire? Assume Beginning of Period payments. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $3581240

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You just graduated and started your new job. Your starting salary is $80,000/year. Your employer's 401(k) plan states that your employer will contribute 2% of your salary to your 401(k) regardless of whether you make any contributions or not - this is called a "non-elective contribution". They will also match your contributions, $1-for $1, up to 6% of your salary. Please answer the following questions: How much ($) will your employer contribute to your 401(k) per year if you make $0 contributions? (this is a non-elective contribution from your employer) $ 1600 What is the minimum amount ($) that you must contribute per year to get the maximum match from your employer? $ 4800 Assume that you make the minimum contribution to get the maximum match from your employer. What is the total amount ($) that will be contributed to your 401(k) for the year, including the employer's non-elective contribution, the employer's matching contribution, and your contribution? $ 11200 Assume that this annual total contribution is made for 45 years and your 401(k) earns an average annual return of 6%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $2636056 After doing a budget, you realize that you can make a contribution of $4,000 per year to a Roth IRA, in addition to the total contributions to your 401(k) - including your employer's total contributions. Assuming the same annual rate of return and number of years to retirement as above, how much will you have in your accounts (4019k) and Roth IRA) when you retire? Assume Beginning of Period payments. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $3581240
Transcribed Image Text:You just graduated and started your new job. Your starting salary is $80,000/year. Your employer's 401(k) plan states that your employer will contribute 2% of your salary to your 401(k) regardless of whether you make any contributions or not - this is called a "non-elective contribution". They will also match your contributions, $1-for $1, up to 6% of your salary. Please answer the following questions: How much ($) will your employer contribute to your 401(k) per year if you make $0 contributions? (this is a non-elective contribution from your employer) $ 1600 What is the minimum amount ($) that you must contribute per year to get the maximum match from your employer? $ 4800 Assume that you make the minimum contribution to get the maximum match from your employer. What is the total amount ($) that will be contributed to your 401(k) for the year, including the employer's non-elective contribution, the employer's matching contribution, and your contribution? $ 11200 Assume that this annual total contribution is made for 45 years and your 401(k) earns an average annual return of 6%. How much will you have in your account at the end of this time period? Assume Beginning of Period Contributions. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $2636056 After doing a budget, you realize that you can make a contribution of $4,000 per year to a Roth IRA, in addition to the total contributions to your 401(k) - including your employer's total contributions. Assuming the same annual rate of return and number of years to retirement as above, how much will you have in your accounts (4019k) and Roth IRA) when you retire? Assume Beginning of Period payments. Round your answer to the nearest dollar - do NOT enter any cents or MyLab will mark your answer as "incorrect". $3581240
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