Reece is comparing retirement plans with prospective employers. ABC, Inc., offering a salary of $38,000, will match 75 percent of his contributions up to 10 percent of his salary, his maximum contribution. XYZ Company will match 100 percent of his contribution up to 6 percent of salary, but he can contribute up to 15 percent of his income. XYZ Company is offering a $35,000 salary. If Reece assumes that he will contribute the maximum amount allowed and keep these first-year retirement funds invested for 30 years with a return of 9 percent, how much would each account be worth? How can he use this information when choosing an employer? Click on the table icon to view the FVIF table If Reece assumes that he will contribute the maximum amount allowed and keep these first-year retirement funds invested for 30 years with a return of 9 percent, the ABC account will be worth $ (Round to the nearest cent.) Data table 11% Compound Sum of $1 (FVIF) n 5% 6% 7% 8% 9% 10% 12% 20 2.6533 3.2071 3.8697 4.6610 5.6044 6.7275 8.0623 9.6463 25 3.3864 4.2919 5.4274 6.8485 8.6231 10.8347 13.5855 17.0001 26 3.5557 4.5494 5.8074 7.3964 9.3992 11.9182 15.0799 | 19.0401 27 3.7335 4.8223 6.2139 7.9881 10.2451 13.1100 16.7386 21.3249 28 3.9201 5.1117 6.6488 8.6271 11.1671 14.4210 18.5799 23.8839 |29|4.1161 5.4184 7.1143 9.3173 12.1722 15.8631 20.6237 26.7499 30 4.3219 5.7435 7.6123 10.0627 13.2677 17.4494 22.8923 | 29.9599 31 4.5380 6.0881 8.1451 10.8677 14.4618 19.1943 25.4104 33.5551 |32 4.7649 6.4534 8.7153 11.7371 15.7633 21.1138 28.2056 37.5817 33 5.0032 6.8406 9.3253 12.6760 17.1820 23.2252 31.3082 42.0915 |34| 5.2533 7.2510 9.9781 13.6901 18.7284 25.5477 34.7521 47.1425 35 5.5160 7.6861 10.6766 14.7853 20.4140 28.1024 38.5749 52.7996

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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Question

Reece is comparing retirement plans with prospective employers. ABC, Inc., offering a salary of $38000, will match 75 percent of his contributions up to 10 percent of his salary, his maximum contribution. XYZ Company will match 100 percent of his contribution up to 6 percent of salary, but he can contribute up to 15 percent of his income. XYZ Company is offering a $35000 salary. If Reece assumes that he will contribute the maximum amount allowed and keep these first-year retirement funds invested for 30 years with a return of 9 percent, how much would each account be worth? How can he use this information when choosing an employer?

Reece assumes that he will contribute the maximum amount allowed and keep these first-year retirement funds invested for 30 years with a return of 9 percent, the ABC account will be worth $? (Round to the nearest cent.)