Question

Ian participates in a 401(k) plan at work. For every $1 Ian contributes to the plan, his employer adds 50 cents. Employer contributions end after employees contribute $2,500 to the plan. Last year, Ian contributed $75 to his plan each week. What was the total amount of contribution (employee + employer) to his plan last year?

Answer 1

Answer: $5,150

Explanation:using the information given above,

For every $1 contributed by the employee, employer adds 50cent.

Employer contribution ends after employee contributes $2500 to the 401(k) plan.

Last year:

Ian's weekly contribution = $75

Number of weeks in a year = 52

Ian's total contribution ($75 × 52) = $3,900

Ian's Employer's total contribution:

$0.5 × $2500 = $1,250

Therefore total contribution last year :

$3900 + $1250 = $5,150