(Annuity FV Table Required) Jennifer recently earned a degree in accounting and her first employment opportunity is an accountant at a major corporation

The 401K portion of her employment package has a personal investment cap at 20% of her salary and the employer contribution portion is 50% of her contribution. Her annual salary is $56,500 and she chose to invest 14% annually. Calculate the value of her 401K after 10 years at 4%, and then calculate the value of her 401K had she invested the maximum amount that her employer would match.

What will be an ideal response?

$142,451.19; $203,501.70
Explanation: Future value = Amount of each cash installment × (Annuity FV factor for i =interest and n = years)
Annual employee investment:
(0.14 × $56,500 ) = $7,910
Annual Employer investment:
(0.07 × $56,500 ) = $3,955
Combined investment:
$11,865
Future value:
($11,865 × 12.006 ) = $142,451.19
Annual maximum investment employer would match:
(0.20 × $56,500 ) = $11,300
Annual employer investment:
(0.10 × $56,500 ) = $5,650
Combined maximum investment:
$16,950
Future Value of maximum contribution:
($16,950 × 12.006 ) = $203,501.70