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A 50 year old employee contributes 20000 per year to her 401k, and her employer matches...

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Finance

A 50 year old employee contributes 20000 per year to her 401k,and her employer matches her contributions by 40%. The investmentcompany has provided her with two options:

Option 1Option 2
Equity60%40%
Bond30%40%
Money Market Fund10%20%

The employee wants to retire at 65. The average rates of returnpresented are 5% on equity, 3% on bonds, and 1% on money marketfunds. Calculate the total amount of money at the time ofretirement under each option.

Answer & Explanation Solved by verified expert
4.2 Ratings (875 Votes)
Step to calculate fund value at retirementCalculate average return of each    See Answer
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