if an employee invests 5% of his pre - tax salary into a retirement plan, the company will match 25% of that…

if an employee invests 5% of his pre - tax salary into a retirement plan, the company will match 25% of that amount. how much will the company contribute to the plan if the employee earns $50,000 before taxes?\na $6,250\nb $2,500\nc $ 625\nd $ 250

if an employee invests 5% of his pre - tax salary into a retirement plan, the company will match 25% of that amount. how much will the company contribute to the plan if the employee earns $50,000 before taxes?\na $6,250\nb $2,500\nc $ 625\nd $ 250

Answer

Explanation:

Step1: Calculate the employee's investment

The employee's pre - tax salary is ( $50,000 ). The employee invests ( 5% ) of the pre - tax salary. The employee's investment ( E=50000\times0.05=$2500 )

Step2: Calculate the company's contribution

The company matches ( 25% ) of the employee's investment. Let ( C ) be the company's contribution. Then ( C = 0.25\times E ) Substitute ( E = 2500 ) into the formula: ( C=0.25\times2500=$625 )

Answer:

C. $625