Question

Lydia's salary is $60,530, and she makes 401K contributions. She saves 7% of her salary and her
company will match 50% of her 7% contribution. How much does her company contribute to her
401K?

answers below:

$2,118.55

$4,237.10

$6,795.10

$8,474.20

Answer 1

To calculate how much Lydia saves for her 401K and how much her company contributes, we can follow these steps:

1. **Calculate Lydia's 401K contribution:**
- Lydia saves 7% of her salary.
- \( \text{Lydia's contribution} = 0.07 \times 60,530 = 4,236.90 \)

2. **Calculate the company's match:**
- The company matches 50% of Lydia's contribution:
- \( \text{Company match} = 0.50 \times 4,236.90 = 2,118.45 \)

So, the company's contribution to her 401K is approximately $2,118.45. Since the options provided are rounded to the nearest cent, the closest answer is:

**$2,118.55**