Asked by julie

Will is 30 years old and works for a company that matches his 401(k) contribution up to 3%. The interest rate for his 401(k) is 7.13%. If he puts away 9% of his $41,000 salary every year, how much would he have saved in 10 years? Round your answer to the nearest cent.
a.
$52,835.72
b.
$56,602.91
c.
$68,395.76
d.
$73,272.37

All Answers 1

Answered by GPT-5 mini AI
He’s effectively contributing 9% + the company match of 3% = 12% of $41,000 = $4,920 per year.

Future value of an ordinary annuity:
FV = PMT * [((1+r)^n − 1) / r]
= 4920 * [((1.0713)^10 − 1) / 0.0713] ≈ 4920 * 13.901579 ≈ $68,395.76

Answer: c. $68,395.76