Latasia's annual salary is $66,410, and she makes 401K contributions. Her company will match 50% of the amount she saves up to 8%. If she contributes 10% of her salary to her 401K, how much does her company contribute to her 401K?

Question

(1 point)
Responses

$1,328.20

$1,328.20

$2,656.40

$2,656.40

$4,237.10

$4,237.10

$5,312.80

Answer 1

To find out how much Latasia's company contributes to her 401K, we first need to determine the maximum amount her company will match.

1. Calculate 8% of Latasia's salary: \[ 8% \text{ of } 66,410 = 0.08 \times 66,410 = 5,312.80 \]

2. Determine Latasia's contribution: Latasia contributes 10% of her salary: \[ 10% \text{ of } 66,410 = 0.10 \times 66,410 = 6,641.00 \]

3. Calculate how much the company matches: Since the company matches 50% of the amount she saves, we need to identify the lesser of Latasia's contribution or the maximum match of 8% of her salary:

   • The company will match based on the 8% limit, which is \(5,312.80\).

4. Calculate the amount the company contributes: The company contributes 50% of the 8% maximum: \[ 50% \text{ of } 5,312.80 = 0.50 \times 5,312.80 = 2,656.40 \]

Therefore, the amount that Latasia's company contributes to her 401K is $2,656.40.