Will is 30 years old and works for a company that matches his 401(k) contribution up to 3%. the interest rate for his 401(k) is 7.13%. if he puts away 9% of his $41,000 salary every year, how much would he have saved in 10 years? round your answer to the nearest cent.
a.
$52,835.72
b.
$56,602.91
c.
$68,395.76
d.
$73,272.37

Option (C) is correct.

Will has saved $68,395.76 in 10 years.

Step-by-step explanation:

Will puts 9% of his $41,000 salary every year

Therefore,

The employer contributes a maximum of 3% of the employee contribution, that is

Therefore, Total annual contribution of Will is ( 3690 + 1230) = $4920

After 10 years, total money Will saved is calculated as ,

Substitute n = 10

P = annual payment = $4920

r = rate of interest  = 0.0713

We get,

Option (C) is correct.

Thus, Will has saved $68,395.76 in 10 years.

c. $68,395.76

Step by step explanation:

We have been given that Bill contributes 9% of his $41,000 salary every year for his 401(k). The company matches  his 401(k) contribution up to 3%.                    

First of all let us find 12% (9%+3%) of $41,000.

Therefore, $4920 is contributed to Will's 401(k) annually.

Now we will use regular deposits formula to find the amount of money saved in 10 years.

, where,

= Amount after n years,

=  Deposit amount per period,

= Interest rate in decimal form,

= Number of deposits in a year,

= Number of years.

Let us convert our given interest rate in decimal form.

Upon substituting our given values in regular deposit formula we will get,

Therefore, Will would have saved $68395.76 in 10 years and option c is the correct choice.