Question

Lou's gross annual income is $41 028. he is paid biweekly and has 4% deducted from his paychecks for his 401(k) . his employer mathes his deduction up 3%

how much is deposited into lous 401(k) each payday

94.68
110.46
119.67
126.24​

Answer 1

$110.46

Explanation:

Just took the test and this is the correct answer

Answer 2

The correct option is;

$119.67

Explanation:

Here we have

Annual income = $41028

Percent deducted = 4%

Contribution by the Employer = 3%

Therefore his annual contribution is $41028 × 0.04 = $1641.12

Annual contribution by the employer = $41028 × 0.03 = $1230.84

Total annual contribution = $2871.96

However, he is paid every two weeks, therefore, since there are approximately 2 weekly payments each month, we have 24 payments a year.

That is the amount of money deposited into Lou's 401(k) each payday is

$2871.96/24 = $119.665 ≈ $119.67.