Question

All workers at Bulger Lumber Company receive a pension that is calculated by multiplying the number of years worked times 2.125% of the average of the 3 highest year's salaries. John has worked for BLC for 35 years and is retiring. His highest salaries were $88,000, $91,000, and $92,250. Calculate John's pension

Answer 1

$67247.39

Step-by-step explanation

Step 1

find the average of the 3 highest years salaries

Let

`\begin{gathered} \text{salary}_1=88000 \\ \text{salary}_2=91000 \\ \text{salary}_3=92250 \end{gathered}`

hence

`\begin{gathered} \text{salary average=}(salary_1+salary_2+salary_3)/(3) \\ \text{salary average=}(88000+91000+92250)/(3) \\ \text{salary average=}(271250)/(3) \\ \text{salary average=90416.67} \end{gathered}`

Step 2

find the 2.125 % of salary average

`2.125\text{ \% = }\frac{\text{2.125}}{100}=0.02125`

so, to find the 2.125 % of any number, multiply the number by 0.02125

Hence

`21.25\text{ \% of 90416.67=0.019212125}\cdot90416.67=1921.35`

Step 3

find the pension

pension that is calculated by multiplying the number of years worked times 2.125% of the average of the 3 highest year's salaries.

Let

years John worked=35

replace

`\begin{gathered} \text{Pension}=35\cdot1921.35 \\ \text{Pension}=67247 \end{gathered}`

I hope this helps you