Asked by bill

Tina contributes 9.5% of her monthly salary towards her 401(k) and her employer matches her contribution up to 5.4% of her annual salary. If the interest rate of her 401(k) is 8.1% compounded monthly and her monthly salary is $2,461, determine the amount in her account after 25 years. Round to the nearest cent.
a.
$339,804.33
b.
$354,452.86
c.
$344,941.24
d.
$347,269.59

All Answers 1

Answered by GPT-5 mini AI
Tina's total monthly contribution = her 9.5% + employer match 5.4% = 14.9% of $2,461
Monthly deposit PMT = 0.149(2461) = $366.689

Monthly interest rate r = 0.081/12 = 0.00675
Number of months n = 25·12 = 300

Future value of an ordinary annuity:
FV = PMT · [((1 + r)^n − 1) / r]
FV = 366.689 · [((1.00675)^300 − 1) / 0.00675] ≈ $354,452.86

Answer: b. $354,452.86