Question

Melissa's employer matches retirement funds 1:2 up to 6% of salary. She makes $55,000 per year. How much should she contribute to the 401(k)?

Answer 1

Answer: $1100

Explanation:

The employer contributes, along with Melissa, in the ratio of 1:2

Up to 6% of $55000, therefore 6/100 x 55000 = 3300

Split in the ratio of 1:2, she will contribute 1/3 of 3300 = 1100

and the employer will contribute 2/3 of 3300 = 2200