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Natalinna started working at Charles Incorporated in 2020 at age 40 and earned a salary...

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Finance

Natalinna started working at Charles Incorporated in 2020 at age 40 and earned a salary of $72,000 in her first year. She is entitled to a pension equal to 2% of final pay for each year of service, with payment made at the beginning of each retirement year. She will work until she is 65 years old. Salaries will grow at 2.5% per year. Average life expectancy is 20 years after retirement. Discount rate is 6%.

Required: Given the above information, calculate the required funding at the end of the first year (2020) and second year (2021) for the three methods: Accumulated Benefit method, Projected Unit method and Level Contribution method.

SHOW ALL CALCULATIONS for each method.

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