Question

Baby Corp offers its employees a pension plan that calculates the annual pension by averaging the last five years' salary and multiplies it by the number of years of service as well

as a multiplier of 1.5%. Brad has worked for Baby Corp for 22 years. His last five years salaries are listed below. What is Brad's monthly pension payment?
Last Five Salaries:
$53,500.00
$55,650.00
$57,500.00
$58,000.00
$59,750.00
$1.564.20
$19,717.5
$18,770.40
$1,643.13

Answer 1

To calculate Brad's monthly pension payment, we need to find the average salary, multiply it by the number of years of service and a multiplier, and then divide the annual pension by 12 to get the monthly payment. Brad's monthly pension payment is $46.71.

Step-by-step explanation:

To calculate Brad's monthly pension payment, we need to follow the given formula: Pension = (Average Salary) x (Years of Service) x (Multiplier)

First, let's calculate the average salary:

• Add up the last five salaries: $53,500 + $55,650 + $57,500 + $58,000 + $59,750 = $284,400
• Divide the sum by 5 to get the average salary: $284,400 / 5 = $56,880

Next, plug the values into the formula:

• Pension = $56,880 x 22 x 1.5% = $560.48

Finally, convert the annual pension to a monthly payment by dividing by 12:

• Monthly pension payment = $560.48 / 12 = $46.71

Brad's monthly pension payment is $46.71.