Answer to Question #261764 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. $2,698.12 d. $6,745.30

Answer 1

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

Answer is c=$2698.12