Arnold Rossiter Is a 40-Year-Old Employee of the Barrington Company

question 2

Multiple Choice

Arnold Rossiter is a 40-year-old employee of the Barrington Company who will retire at age 60 and expects to live to age 75.The firm has promised a retirement income of $20,000 at the end of each year following retirement until death.The firm's pension fund is expected to earn 7 percent annually on its assets and the firm uses 7% to discount pension benefits.What is Barrington's annual pension contribution to the nearest dollar for Mr.Rossiter? (Assume certainty and end-of-year cash flows.)

• A) $2,756
• B) $3,642
• C) $4,443
• D) $4,967
• E) $5,491

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