Question

Catherine's employer matches 25% of her 401(k) contributions — up to $2000. Catherine's salary is $50,000, and last year she contributed $10,000 to her 401(k) plan. What was her employer's contribution to the 401(k)?

Answer 1

25% of $10,000 is $2,500

But because they only match "up to $2,000," her employers contribution was $2,000

Answer 2

We have been given that Catherine's employer matches 25% of her 401(k) contributions or a maximum of $2000. Further we are given that Catherine's salary is $50,000 and she contributed $10,000 to her 401(k) plan.

Let the contribution form her employer be $x. We are given that her employer matches 25% of Catherine's contribution under 401(k) plan. Therefore, contribution made by employer would be either 25% of 10,000 or 2000, whichever is lesser.

Let us find 25% of 10,000.

`25\% \text{ of 10000 } = 10,000 * (25)/(100) = \$2500`

Since 25% of 10,000 is more than 2000, therefore, Catherine's employer would make a contribution of $2000.