Ferdinand's employer will match 50% of his $250 monthly contributions to his 401 (k). This means that Ferdinand's employer will put 50% of $250 = $125 into Ferdinand's 401 (k) account each month in addition to Ferdinand's $250. What a swell benefit

Answer and Explanation:

The computation of the given question is shown below:-

Total Contributions = Monthly contribution + Amount invested in Ferdinand's 401 (k)

= $250 + $125

= $375

1. Future Value = PMT [ ((1 + r) n - 1) : r

Future value = 375 * ((1 + 0.03 : 12) * 12 * 40 - 1) : (0.03 : 12)

= $347,272

2. Ferdinand deposit = Given Amount * Total number of months in a year * Number of years

= $250 * 12 Months * 40 Years

= $120,000

3. The Amount put in by the employer = 50% of $250 * Total number of months in a year * Number of years

= $125 * 12 Months * 40 Years

= $60,000

4. Interest = Future value - Ferdinand deposit - The Amount put in by the employer

= $347,272 - $120,000 - $60,000

= $167,272

We simply applied the above formulas