A non-profit organization offers a 5% salary contribution to John's 403b plan and matching 5% when John contributes 5% of his/her salary. John makes $56,000 a year.
-What is John's total cost of his 5% contribution?

Question

Quizplus · Accepted Answer

The non-profit organization offers a 5% salary contribution and matching 5% when John contributes 5% of his salary. Therefore, John's total contribution would be 10% of his salary, which is $5,600 per year. The non-profit organization contributes 5%, which is $2,800 per year. So, John's total cost of his 5% contribution is $2,800 - $700 (non-profit organization contribution) = $2,100. Therefore, the correct answer is C, which is $700 benefit.

A Non-Profit Organization Offers a 5% Salary Contribution to John's