Question
In example 6.2.4, and employee is able to contribute $123.25 to a 100% employer-matched 401(k), which is invested at an average APR of 6.3% compounded monthly. After 11 years, the employee retires.
What is the size of the monthly contribution after the employer match is accounted for? PMT
What is the size of the monthly contribution after the employer match is accounted for? PMT
Answers
GPT-4o mini
In this scenario, the employee is contributing $123.25 to their 401(k) plan, with the employer matching 100% of that contribution. This means that the total monthly contribution, when accounting for the employer match, would be:
\[
\text{Total Monthly Contribution} = \text{Employee Contribution} + \text{Employer Match}
\]
Since the employer matches 100%, the employer contribution will also be $123.25. Therefore, the total monthly contribution is:
\[
\text{Total Monthly Contribution} = 123.25 + 123.25 = 246.50
\]
So, the size of the monthly contribution after the employer match is accounted for is **$246.50**.
\[
\text{Total Monthly Contribution} = \text{Employee Contribution} + \text{Employer Match}
\]
Since the employer matches 100%, the employer contribution will also be $123.25. Therefore, the total monthly contribution is:
\[
\text{Total Monthly Contribution} = 123.25 + 123.25 = 246.50
\]
So, the size of the monthly contribution after the employer match is accounted for is **$246.50**.