Question

Your friend Michelle just graduated and has two job offers that she is considering. Both job offers pay the same, but JobA

contributes $1,700 annually to Michelle's retirement plan while Job B does not offer a retirement plan at all. Assuming that Michelle
will be at her first job for 5 years and that she will earn 6.60% annually on her retirement savings plan, how much will Michelle have
in her retirement plan at Job A? (Round answer to nearest whole number)

Answer 1

Money offered to Michelle per annum in Job A = $1700

Number of years she will work in job A = 5

Percentage of earnings per annum for her retirement plan = 6.60%

Money she will earn will be the simple interest at the end of 5 years.

We know that :

`\color{plum}{ \tt{Simple \: interest = (Principle \ \: * \: Rate \: \: * \: \: Time)/(100) }}`

Principal = $1700

Rate = 6.60%

Time = 5 years

Which means :

`= (1700 * 6.60 * 5)/(100)`

`= (56100)/(100)`

`= \color{plum}\$561`

We also know that :

`\color{plum}\tt \: Amount = Principal + Interest`

Amount Michelle will earn at the end of 5 years for her retirement plan :

`= 1700 + 561`

`=\color{plum}\bold{\$ 2261}`

2261 can be rounded off to 2260.

Therefore, Michelle will earn $2260 at the end of 5 years for her retirement plan.