Question

Jose contributes to an employer-sponsored 401(k) plan. For the first 6% of

Jose's salary, his employer matches 100% of his 401(k) contributions, and

from 6% to 12%, Jose's employer matches 50% of his 401(k) contributions,

Jose's salary is $50,000, and last year he contributed $6000 to his 401(k)

plan. What was the total amount that was contributed to his 401(k) last year?

O A. $10,500

B. $17,200

C. $14,500

D. $16,000

Answer 1

The correct answer is $10,500.

Answer 2

(A)$10,500

Explanation:

Joe contributed $6000 out of a salary of $50,000.

6% of $50,000=$3000

Since his employer matches 100% of his contributions for the first 6%:

The employer adds $3000.

For the other $3000, Jose's employer matches 50%.

Therefore, the employer adds:

50% X 3000=$1500

Total Contribution by Jose's Employer = $3000+1500=$4500

Therefore, the total amount that was contributed to Jose's account last year

=Joe's Contribution + Employer's Contribution

=6000+4500

=$10,500

The correct option is A.