Question

Mrs. Brown has been working in a factory for 28 years. She is preparing to retire. Her pension is calculated on the average of her last 3 years' salaries when she earned $38,592; $37,590; and $37,010. Her employer will give her 1.8% of that average for each year she worked. Calculate her pension.

a) $683.60
b) $682.14
c) $670.02
d) $665.78

Answer 1

To calculate Mrs. Brown's pension, the average of her last 3 years' salaries was first computed, then 1.8% of that average was taken for each year she worked, resulting in an annual pension of $18,939.72.

Step-by-step explanation:

First, we need to calculate the average of Mrs. Brown's last 3 years' salaries:

• $38,592
• $37,590
• $37,010

Average salary = ($38,592 + $37,590 + $37,010) / 3

Average salary = $113,192 / 3

Average salary = $37,730.67

Next, we calculate the pension by taking 1.8% of the average salary for each year of work:

Pension = 1.8% × average salary × number of years worked

Pension = 0.018 × $37,730.67 × 28 years

Pension = $18,939.72

Therefore, Mrs. Brown's annual pension will be $18,939.72.