Use the Table Below to Answer the Following Question(s) -What's the Total Retirement Balance When Sheila Has Reached the Joined

question 64

Multiple Choice

Use the table below to answer the following question(s) .
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array}{|l|l|}\hline \text { Retirement Plan Model for Sheila } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Retirement Contribution (percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$
-What's the total retirement balance when Sheila has reached the age of 40 while working with Simsin?

• A) $108,374.54
• B) $56,253.36
• C) $53,627.87
• D) $91,163

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Definitions:

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Functional Currency

The currency of the primary economic environment in which an entity operates, typically the currency in which it principally generates and expends cash.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a portion of the corporation’s earnings.

Foreign Subsidiary

A company that is partially or wholly owned but is located in a different country than the parent company, subject to the laws and regulations of the country in which it operates.