Retirement Plan Matching up to 6% You have recently graduated with a Bachelors d
ID: 2612568 • Letter: R
Question
Retirement Plan
Matching up to 6%
You have recently graduated with a Bachelors degree in Hospitality Management from the Woodbury School of Business. After applying at several hotels you are offered a position, which you accept, as a sales coordinator at a limited service hotel. The starting salary is competitive and the company is experiencing substantial growth and great opportunities abound. The company also offers a competitive benefits package including matching 401k contributions up to 6%.
Starting Annual Salary
US$30,000
Salary Growth Rate (Yr 0 to 10)
10%
Salary Growth Rate (Yr 11 to 20)
5%
Salary Growth Rate (Yr 21 to 40)
3%
Company Contribution
6%
Individual Contribution
6%
Investment Interest Rate
12%
Part 1: Fill in the table below using the information contained in the table above then answer the questions at the bottom of the table. (3 pts)
Year
Salary
Annual Individual Contribution
Total Contributed Annually
Interest Earned On Principle
Ending Principle
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Retirement Plan
Matching up to 6%
You have recently graduated with a Bachelors degree in Hospitality Management from the Woodbury School of Business. After applying at several hotels you are offered a position, which you accept, as a sales coordinator at a limited service hotel. The starting salary is competitive and the company is experiencing substantial growth and great opportunities abound. The company also offers a competitive benefits package including matching 401k contributions up to 6%.
Starting Annual Salary
US$30,000
Salary Growth Rate (Yr 0 to 10)
10%
Salary Growth Rate (Yr 11 to 20)
5%
Salary Growth Rate (Yr 21 to 40)
3%
Company Contribution
6%
Individual Contribution
6%
Investment Interest Rate
12%
Part 1: Fill in the table below using the information contained in the table above then answer the questions at the bottom of the table. (3 pts)
Year
Salary
Annual Individual Contribution
Total Contributed Annually
Interest Earned On Principle
Ending Principle
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Explanation / Answer
Solution.
Year Salary Annual Individual Contribution Total Contributed Annually Interest Earned On Principle Ending Principle 0 $30,000 $1,800 $3,600 $432 $30,432 1 $33,000 $1,980 $3,960 $475 $33,475 2 $36,300 $2,178 $4,356 $523 $36,823 3 $39,930 $2,396 $4,792 $575 $40,505 4 $43,923 $2,635 $5,271 $632 $44,555 5 $48,315 $2,899 $5,798 $696 $49,011 6 $53,147 $3,189 $6,378 $765 $53,912 7 $58,462 $3,508 $7,015 $842 $59,303 8 $64,308 $3,858 $7,717 $926 $65,234 9 $70,738 $4,244 $8,489 $1,019 $71,757 10 $77,812 $4,669 $9,337 $1,120 $78,933 11 $81,702.89 $4,902 $9,804 $1,177 $82,879 12 $85,788.03 $5,147 $10,295 $1,235 $87,023 13 $90,077.43 $5,405 $10,809 $1,297 $91,375 14 $94,581.31 $5,675 $11,350 $1,362 $95,943 15 $99,310.37 $5,959 $11,917 $1,430 $100,740 16 $104,275.89 $6,257 $12,513 $1,502 $105,777 17 $109,489.68 $6,569 $13,139 $1,577 $111,066 18 $114,964.17 $6,898 $13,796 $1,655 $116,620 19 $120,712.38 $7,243 $14,485 $1,738 $122,451 20 $126,747.99 $7,605 $15,210 $1,825 $128,573 21 $130,550.43 $7,833 $15,666 $1,880 $132,430 22 $134,466.95 $8,068 $16,136 $1,936 $136,403 23 $138,500.96 $8,310 $16,620 $1,994 $140,495 24 $142,655.98 $8,559 $17,119 $2,054 $144,710 25 $146,935.66 $8,816 $17,632 $2,116 $149,052 26 $151,343.73 $9,081 $18,161 $2,179 $153,523 27 $155,884.05 $9,353 $18,706 $2,245 $158,129 28 $160,560.57 $9,634 $19,267 $2,312 $162,873 29 $165,377.38 $9,923 $19,845 $2,381 $167,759 30 $170,338.71 $10,220 $20,441 $2,453 $172,792 31 $175,448.87 $10,527 $21,054 $2,526 $177,975 32 $180,712.33 $10,843 $21,685 $2,602 $183,315 33 $186,133.70 $11,168 $22,336 $2,680 $188,814 34 $191,717.71 $11,503 $23,006 $2,761 $194,478 35 $197,469.25 $11,848 $23,696 $2,844 $200,313 36 $203,393.32 $12,204 $24,407 $2,929 $206,322 37 $209,495.12 $12,570 $25,139 $3,017 $212,512 38 $215,779.98 $12,947 $25,894 $3,107 $218,887 39 $222,253.38 $13,335 $26,670 $3,200 $225,454 40 $228,920.98 $13,735 $27,471 $3,296 $232,217 Total $5,091,524 $305,491 $610,983 $73,318 $5,164,842Related Questions
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