Who Will Have a Greater Accumulated Sum from Their Superannuation

question 106

Essay

Who will have a greater accumulated sum from their superannuation at retirement?
(a)Jane, who contributes $450 per month for 40 years and earns (after fees)an average of 7.5% pa (compounding monthly)in her industry fund; or
(b)John, who contributes $550 per month for 40 years and earns (after fees)an average of 6.5% pa (compounding monthly)in his retail fund.

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Definitions:

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, showing the cost of fixed resources per unit of output.

Total Fixed Costs

Expenses incurred by a business that do not vary with the level of production or sales, including lease payments and salaries of permanent staff.

Total Variable Costs

The sum of all costs that vary with the level of production, including materials and labor.

Total Variable Costs

The sum of all costs that vary directly with the level of production or output.