Question

Your friend Michelle just graduated and has two job offers that she is considering. Both job offers pay the same, but JobA
contributes $1,700 annually to Michelle's retirement plan while Job B does not offer a retirement plan at all. Assuming that Michelle
will be at her first job for 5 years and that she will earn 6.60% annually on her retirement savings plan, how much will Michelle have
in her retirement plan at Job A? (Round answer to nearest whole number)

Answer 1

Money offered to Michelle per annum in Job A = $1700

Number of years she will work in job A = 5

Percentage of earnings per annum for her retirement plan = 6.60%

Money she will earn will be the simple interest at the end of 5 years.

We know that :

$\color{plum}{ \tt{Simple \: interest = \frac{Principle \ \: \times \: Rate \: \: \times \: \: Time}{100} }}$

Principal = $1700

Rate = 6.60%

Time = 5 years

Which means :

$= \frac{1700 \times 6.60 \times 5}{100}$

$= \frac{56100}{100}$

$= \color{plum}\ 561$

We also know that :

$\color{plum}\tt \: Amount = Principal + Interest$

Amount Michelle will earn at the end of 5 years for her retirement plan :

$= 1700 + 561$

$=\color{plum}\bold{\ 2261}$

2261 can be rounded off to 2260.

Therefore, Michelle will earn $2260 at the end of 5 years for her retirement plan.