Question

(Retirement Savings Plans MC)

A recently-graduated college student is deciding whether to contribute $5,000 per year to a 401k at their job or an IRA. The terms of both are:

IRA: 4.5% rate, compounded annually, with a total value of $15,685.13 after 3 years
401k: employer matches 30% of annual contributions, with a 3.5% rate, compounded annually

Determine the difference in account balances after 3 years.

A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used.

The first offer is greater by $4,505.34.
The second offer is greater by $4,505.34.
The first offer is greater by $154.00.
The second offer is greater by $154.00.

Answer 1

I believe your answer is B: "The second offer is greater by $4,505.34"

Answer 2

ill tell you what i get

Answer 3

an 80 :)

Answer 4

Woo!