Question

11) (Annuity FV Table Required) Jennifer recently earned a degree in accounting and her first employment opportunity is an accountant at a major corporation. The 401K portion of her employment package has a personal investment cap at 20% of her salary and the employer contribution portion is 50% of her contribution. Her annual salary is $56,500 and she chose to invest 14% annually. Calculate the value of her 401K after 10 years at 4%, and then calculate the value of her 401K had she invested the maximum amount that her employer would match.

Answer 1

11)

Current 401(k) balance
Years to invest	10
Annual rate of return	4%
Annual salary	$56,500
Percent to contribute	14%
401(k) contribution*	$7,910.00 per year
Your employer's 401(k) match	$2,825.00 per year.This is a 50% employer matchup to a maximum of 10 % of your annual salary.
Total contribution	$79,100.00
Total employer will contribute	$28,250.00
401(k) could be worth $131,662 after 10 years.
Total without employer match	$97,014

Maximum contribution limited to 20% investment cap
Years to invest	10
Annual rate of return	4%
Annual salary	$56,500
Percent to contribute	20%
401(k) contribution*	$7,910.00 per year
Your employer's 401(k) match	$2,825.00 per year.This is a 50% employer matchup to a maximum of 10 % of your annual salary.
Total contribution	$113,000.00
Total employer will contribute	$28,250.00
401(k) could be worth $173,240 after 10 years.
Total without employer match	$138,591