Question

David's salary is $29,512, and he makes 401K contributions. His company will match 100% of the
amount he saves up to 6%. How much will his company contribute if he contributes 8% of his
salary to his 401K?

(1 point)

$1,700.00

$1,770.72

$1,795.10

$1,825.75

Answer 1

To determine how much David's company will contribute to his 401K, we first need to calculate the amount he contributes based on his salary and the percentage he is saving.

1. **Calculate David's 8% contribution:**
- David's salary = $29,512
- His contribution percentage = 8%
- Amount contributed by David = 8% of $29,512
\[
\text{David's contribution} = 0.08 \times 29,512 = 2,360.96
\]

2. **Calculate the maximum matching contribution from the company:**
- The company's matching percentage is 100% of the amount David saves, but only up to 6% of his salary.
- Maximum contribution that the company will match = 6% of $29,512
\[
\text{Company's match limit} = 0.06 \times 29,512 = 1,770.72
\]

3. **Determine the company's actual contribution:**
- Since David is contributing 8%, which is more than the company's maximum matching limit of 6%, the company will only match up to the 6% limit.
- Therefore, the company will contribute $1,770.72.

So, the answer is **$1,770.72**.