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Trent is 25 years old and works for a company that matches his 401(k) contribution up to 5%. The interest rate for his 401(k) is 7. 3%. If he puts away 10% of his $32,000 salary every year, what would the total of his 401(k) be in 10 years? Round your answer to the nearest cent. A. $67,266. 16 b. $72,176. 59 c. $33,250. 60 d. $35,677. 89.

Respuesta :

chilljain33

The correct statement is that the total of contribution of 401(k) of Trent will be $72176.59 in the next 10 years. So, the correct option that matches the statement is B.

The calculation of the future value of the contribution, done annually by Trent, is done by using the application of Future Value formula with added contribution annually.

Calculation of annual contribution

  • The formula for future value for annual contribution can be calculated using the formula below,

  • [tex]\rm Future\ Value= Present\ Value (1+ Interest\ Rate)^n[/tex]

  • Putting the values for each year, for the first year, can be done as,

  • [tex]\rm Future\ Value = 3200(1+7.3\%)^1^0\\\\\rm Future\ Value= \$3443.6[/tex]

  • Similarly, the calculations can be done to derive the total value of the contribution to $72176.59

Hence, the correct option is B that the value of Trent's contribution will be $72176.59 in the next 10 years for 401(k) contributions.

Learn more about annual contribution here:

https://brainly.com/question/14294009

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