Lauren will make annual contributions in the amount of $4770 on average to a 401 (k) over the next 34 years. Her employer will match 60% of her contributions. She is currently being taxed at 33% but anticipate being taxed at 15% upon retirement. If her account grows at an average rate of 5.5% annually what is the value of Lauren's 401 (k) upon retirement? (show work)

A = $381,435.69

B = $395,228.47

C = $610,297.11

Question

Mathematics

Richard Caldwell

25 August, 03:13

Lauren will make annual contributions in the amount of $4770 on average to a 401 (k) over the next 34 years. Her employer will match 60% of her contributions. She is currently being taxed at 33% but anticipate being taxed at 15% upon retirement. If her account grows at an average rate of 5.5% annually what is the value of Lauren's 401 (k) upon retirement? (show work)

A = $381,435.69

B = $395,228.47

C = $610,297.11

+3

Answers (1)

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Matthew Jennings · Answer 1

See the equation of future value of annuity ordinary through Google

Flao=4,770 * (((1+0.055) ^ (34) - 1)

: (0.055)) = 448,747.87

Then

448,747.87 - (448,747.87*0.15)

=381,435.69. 15% upon retirement.