Asked by Jenna Garland on Apr 24, 2024
Verified
Maria's employer of 19 years offers a pension plan that is the product of the three -year average of her most current salaries,the number of years of service,and a 2% multiplier.Her last three salaries are: $63,500,$65,000,and $66,500.What is her annual pension benefit?
A) $23,940
B) $24,700
C) $65,000
D) $247,000
Pension Plan
A type of retirement plan where an employer makes contributions to a pool of funds set aside for an employee's future benefit.
Multiplier
A factor by which an economic variable is multiplied to estimate its impact on other variables.
Salaries
Regular payments made by an employer to an employee, typically paid monthly or biweekly for professional or office work.
- Familiarize oneself with the essential aspects of retirement savings and pension arrangements, including the assessment of benefits derived from salary averages and duration of service.
Verified Answer
AS
amanpreet singh5 days ago
Final Answer :
B
Explanation :
First, we need to find the three-year average of her most current salaries.
(63500+65000+66500)/3 = $65,000
Then, we use the formula:
Annual pension benefit = (Three-year average salary) x (Years of service) x (Multiplier)
Annual pension benefit = $65,000 x 19 x 0.02
Annual pension benefit = $24,700
Therefore, Maria's annual pension benefit is $24,700.
(63500+65000+66500)/3 = $65,000
Then, we use the formula:
Annual pension benefit = (Three-year average salary) x (Years of service) x (Multiplier)
Annual pension benefit = $65,000 x 19 x 0.02
Annual pension benefit = $24,700
Therefore, Maria's annual pension benefit is $24,700.
Learning Objectives
- Familiarize oneself with the essential aspects of retirement savings and pension arrangements, including the assessment of benefits derived from salary averages and duration of service.
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