Question

Parker is a highly skilled sales person at Byberry, which is a 30-year-old company that has grown significantly in terms of revenue and product offerings. It sponsors a pension plan that provides a benefit of 2% times the years of participation times the average of the final three years of salary. Parker has worked for Byberry for the last 30 years and earned $200,000 two years ago, $150,000 last year, and $250,000 this year. If he is retiring this year, how much should he expect to receive as a pension benefit?

Answer 1

$120,000

Step-by-step explanation:

The retirement benefit that Parker expects is

2% x number of years worked( 30 ) x {($200,000 +$150,000 +$250,000) /3}

=2/100 x 30 x (600,000/3)

=0.02 x 30 x $200,000

=0.6 x $200,000

=$120,000