Question

Reece is comparing retirement plans with prospective employers. ABC, Inc, offlering a salary of $25,800, will match 75 percent of his contributions up to 10 percent of his salary, his $24,500 salary If Reece assumes that he will contribute the maximum amount allowed and keep these first-year much would each account be worth? How can he use this information when choosing an employer? Click on the table icon to view the FVIF table EE XYZ Company will match 100 percent of his contribution up to 6 percent of salary, but he can contribute up to 15 percent of his income. XYZ Company is offering a retirement funds invested for 29 years with a return of 8 percent how worth S (Round to the nearest cent)

Answer 1

	For ABC				For XYZ
Salary	$25,800			Salary	$24,500
Reece Contribution	10%	$2,580		Reece Contribution	15%	$3,675
Contribution from employer	75% of 10% of salary	$1,935		Contribution from employer	100% of 6% of salary	$1,470
Total Accumulation of 1st year		$4,515		Total Accumulation of 1st year		$5,145
Interest Rate	8%			Interest Rate	8%
time	29 Years			time	29 Years
Future value	$42,067.50	4,515*(1.08^29)		Future value	$47,937.38