4
QuizMultiple Choice

Employer Retirement Plans — Quiz

Question 4 • Financial Math

Alicia earns $⁢45,000 annually and works at a company that matches 100% of her 401(k) contributions up to 4% of her salary. The company's vesting schedule is graded: 20% per year over 5 years. Alicia contributes 4% of her salary. After 3 years, how much of the employer contributions are vested?

Answer
A
2 dollars comma 160
B
1 dollars comma 800
C
3 dollars comma 240
D
5 dollars comma 400

Explanation

Alicia contributes 4% of $45,000, or $1,800 per year. The company matches that amount, so after 3 years it has contributed $1,800 × 3 = $5,400. At 20% vesting per year, 60% is vested after 3 years: $5,400 × 0.60 = $3,240, which is choice B.

AI-written and checked against the verified answer.

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