Calculating the annual benefit


An employer uses a final pay formula to determine retirement payouts to its employees. The annual payout is 3 percent of the average salary over the employees' last three years of service times the total years employed. Calculate the annual benefit under the following scenarios.

Year Average salary during the last three years of service.
Worked
17 $40,000
20 $47,000
22 $50,000

 

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Finance Basics: Calculating the annual benefit
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