Congratulations, you have just been employed! You now have a choice between a flat benefit at retirement equal to $4,000 times your years of service, or a career average formula of 3.50% of your average salary times your years of service. You expect to work 40 years. At what average salary would you be indifferent between the two alternatives? O $160,000 O $145,444 O $114,286 O $101,104 O $88,889

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Congratulations, you have just been employed! You now have a choice between a flat benefit at
retirement equal to $4,000 times your years of service, or a career average formula of 3.50% of your
average salary times your years of service. You expect to work 40 years. At what average salary
would you be indifferent between the two alternatives?
O $160,000
O $145,444
O $114,286
O $101,104
O $88,889
Transcribed Image Text:Congratulations, you have just been employed! You now have a choice between a flat benefit at retirement equal to $4,000 times your years of service, or a career average formula of 3.50% of your average salary times your years of service. You expect to work 40 years. At what average salary would you be indifferent between the two alternatives? O $160,000 O $145,444 O $114,286 O $101,104 O $88,889
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