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6.7 Exercise 27

Avg difficulty 2.5

Alice signs up for her employer-based 401(k). The employer matches any 401(k) contribution up to 6% of the employee salary. Alice’s annual salary is $51,600.

  1. What is the most money that Alice can deposit that will be fully matched by the company?
  2. How much total will be deposited into Alice’s account if she deposits the full 6%?
  3. How much return does Alice earn if she deposits exactly 6% in her 401(k)?

OpenStax Contemporary Mathematics, 6.7 Investments, exercise 27

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Adapted from Contemporary Mathematics © 2023 Rice University. Licensed under CC BY 4.0. Source: Contemporary Mathematics. Imported at revision fa7c1a1.