How would I calculate the 401k balance? The yearly salary is $50,000 and the percentage of contribution is 5%. 50,000 * 0.05 = 2500 yearly contribution I'm being asked to use the compound interest formula to calculate the balance. Compound interest formula is: A = P(1+r/n)^nt The accrual happens every two weeks (or 26 times a year). The interest rate is 5%. If the time is between 2 to 4 years, the employer will contribute 50% of what is accrued per period. So, the question is, if the time is 2, how would I calculate this? Would I use 2500 as the principal amount or would I multiple 2500 * 2 = 5000 and use 5000 as the principal amount? What I tried to do was 5000(1+5%/26)^26*2 = 5525.32 5525.32 * 50% = 2762.66 401k balance = 5525.32 + 2762.66 provide the steps to solving this.

Answer rating: 100% (QA)

Heres how to calculate the 401k balance with the given information 1 Calculate the total employee co... View the full answer