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3. Pensions

Last updated over 1 year ago

9 questions

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Question 1

1.

Suppose Lua works for a company for 25 years. Her employer offers a pension benefit package with a flat amount of $60 for each year of service to calculate her monthly pension. How much will the monthly pension be?

$25

$500

$1500

$18,000

Question 2

2.

Martina’s employer offers an annual pension benefi t calculated by multiplying 2.35%career average salarythe number of years employed. Here are Martina’s annual salaries over the last 24 years of employment:
28,800 29,300 30,250 31,000 35,500 42,000 45,000 50,000
28,800 29,900 30,350 35,000 35,700 43,000 48,000 52,000
29,210 29,900 30,450 35,000 38,000 43,900 48,800 52,000

What is Martina’s career average salary?

$291,850

$37,577.50

$901,860

Question 3

3.

What is Martina’s annual pension under this plan?

$21,193.71

$37,577.50

$211,937.1

Question 4

4.

What is Martina’s monthly pension benefit to the nearest penny?

$1200

$1766.14

$21,193.71

Question 5

5.

Office Industries uses a final average formula to calculate employees’ pension benefits. The calculations use the salary average of the final four years of employment. The retiree will receive an annual benefit that is equivalent to 1.4% of the final average for each year of employment.

Charlotte and Krista are both retiring at the end of this year. Calculate their annual retirement pensions:
Krista’s years of employment: 18
Final four annual salaries: $72,000, $74,780, $74,780, $76,000

$18,746.28

$74,390

$78,302.8

Question 6

6.

Office Industries uses a final average formula to calculate employees’ pension benefits. The calculations use the salary average of the final four years of employment. The retiree will receive an annual benefit that is equivalent to 1.4% of the final average for each year of employment.

Charlotte and Krista are both retiring at the end of this year. Calculate their annual retirement pensions:
Charlotte's years of employment: 23
Final four annual salaries: $81,000 $81,000 $81,400 $81,900

$26,186.65

$20,493.9

$81,975.6

Question 7

7.

Suppose someone makes $60,000 in 2015. In 2016, they will recieve a 3% raise. What will their new salary be in 2016?

$63,000

$58,200

$61,800

Question 8

8.

The Morning Sun offers employees a monthly pension calculated by 1.65% of the average of their last three years of annual compensation. He retired in 2010. In 2008, he made $76,000 per year. Thereafter, he received a 3% salary increase each year until he retired. How much was his monthly retirement benefit?

$1292

$78,302

$2400

Question 9

9.

Sara works for the City of Standardville. The city calculates an employee’s pension according to the following formula:
Determine the average of the highest 3 years of annual earnings.
Determine the monthly average using the above amount.
Subtract $600 from that amount.
Multiply the result by 30%.
Add $400 to that result.
For each year of employment over 15 years, add 1% of the average monthly salary
The final result is the monthly pension benefit.

Sara’s three highest annual salaries are $90,000, $92,598, and $93,000. Calculate Sara’s monthly pension benefit to the nearest penny if she retires after 18 years of employment.

$2116.65 a month forever

$2541.82 a month forever

$2746.30 a month forever