If an employer matches contributions to a 401(k) up to a maximum of $1,800 (employer and employee each contribute $1,800) and an additional $2,200 is contributed by the employee, how much will the employee have in 35 years if the investments in the 401(k) earn an average of 9%?
A) $152,600
B) $203,000
C) $1,251,122
D) $776,538

Question

Quizplus · Accepted Answer

The total annual contribution is $3,600 ($1,800 employer + $1,800 employee) plus an additional $2,200 by the employee, totaling $5,800. Using the future value of an annuity formula with a 9% return over 35 years, the future value is approximately $1,251,122.

If an Employer Matches Contributions to a 401(k) Up to a Maximum