Answer to Question #254787 in Financial Math for Dave

Question

Conrad's employer offers graded vesting plan. Every year after the first year, vesting increases 10% with a 2.5% multiplier. If Conrad's three-year average salary was $67,453, and he left after the fourth year, what will his benefit be? A. 2,023.59 B. 5,058.98 C. $2698.12 D. 6,745.30

Answer 1

C. $2698.12

Annual pension=Average salary × multiplier × years of service × vested%

$\$67453×2.5\%×4×10\%=\$674.53$

$\$674.53$ is the benefit for one year and therefore benefit for 4years will be $\$674.53×4=\$2698.12$