arielle earns $75,000 annually. her company offers a 401(k) plan with a 75% match on her contributions up to…

arielle earns $75,000 annually. her company offers a 401(k) plan with a 75% match on her contributions up to 6% of her salary. the vesting schedule is cliff vesting over 4 years. if arielle contributes 6% of her salary, how much will the employer contribute annually, and how much will be vested after 2 years? $3,375 employer contribution, $3,375 vested after 2 years $4,500 employer contribution, $0 vested after 2 years $3,375 employer contribution, $0 vested after 2 years $4,500 employer contribution, $4,500 vested after 2 years

arielle earns $75,000 annually. her company offers a 401(k) plan with a 75% match on her contributions up to 6% of her salary. the vesting schedule is cliff vesting over 4 years. if arielle contributes 6% of her salary, how much will the employer contribute annually, and how much will be vested after 2 years? $3,375 employer contribution, $3,375 vested after 2 years $4,500 employer contribution, $0 vested after 2 years $3,375 employer contribution, $0 vested after 2 years $4,500 employer contribution, $4,500 vested after 2 years

Answer

Explanation:

Step1: Calculate Arielle's contribution

Arielle's salary is $75,000, and she contributes 6% of her salary. So her contribution is $75,000 * 6% = $75,000 * 0.06 = $4,500.

Step2: Calculate employer's contribution

The company matches 75% of her contributions up to 6% of her salary. So the employer's contribution is 75% of $4,500. That is 0.75 * $4,500 = $3,375.

Step3: Determine vested amount after 2 years

The vesting schedule is cliff vesting over 4 years. Cliff vesting means that the employee becomes fully vested after the vesting period (4 years here). So after 2 years, which is less than 4 years, the vested amount is $0.

Answer:

$3,375 employer contribution, $0 vested after 2 years (the third option: $3,375 employer contribution, $0 vested after 2 years)