Question

Lauren will make annual contributions in the amount of $4770 on average to a 401(k) over the next 34 years. Her employer will match 60% of her contributions. She is currently being taxed at 33% but anticipate being taxed at 15% upon retirement. If her account grows at an average rate of 5.5% annually what is the value of Lauren's 401(k) upon retirement? (show work)
A= $381,435.69
B= $395,228.47
C= $610,297.11

Answer 1

See the equation of future value of annuity ordinary through Google
Flao=4,770×(((1+0.055)^(34)−1)
÷(0.055))=448,747.87
Then
448,747.87−(448,747.87×0.15)
=381,435.69. 15% upon retirement.