As part of their employee benefi ts, all workers at Middletown Electronics receive a pension that is calculated by multiplying the number of years worked times 1.65% of the average of their three highest years’ salary. Maureen has worked for Middletown for 27 years and is retiring. Her highest salaries are $97,000, $97,800, and $98,198. Calculate Maureen’s pension.
The Correct Answer and Explanation is:
To calculate Maureen’s pension, we need to follow these steps:
Step 1: Calculate the Average of Maureen’s Three Highest Salaries
Maureen’s three highest salaries are $97,000, $97,800, and $98,198. To find the average, we sum these three values and then divide by 3.Sum of salaries=97,000+97,800+98,198=292,998\text{Sum of salaries} = 97,000 + 97,800 + 98,198 = 292,998Sum of salaries=97,000+97,800+98,198=292,998
Now, divide the sum by 3 to get the average:Average salary=292,9983=97,666\text{Average salary} = \frac{292,998}{3} = 97,666Average salary=3292,998=97,666
Step 2: Calculate 1.65% of the Average Salary
Now that we have the average salary, we need to find 1.65% of it. To do this, multiply the average salary by 1.65% (or 0.0165).1.65% of average salary=97,666×0.0165=1,612.491.65\% \text{ of average salary} = 97,666 \times 0.0165 = 1,612.491.65% of average salary=97,666×0.0165=1,612.49
Step 3: Calculate the Pension
Finally, Maureen’s pension is calculated by multiplying the result from Step 2 by the number of years she has worked (27 years).Pension=1,612.49×27=43,528.23\text{Pension} = 1,612.49 \times 27 = 43,528.23Pension=1,612.49×27=43,528.23
Final Answer:
Maureen’s pension is $43,528.23.
Explanation:
- We began by calculating Maureen’s average salary based on her three highest-paying years.
- Then, we took 1.65% of that average salary, as the pension is based on this percentage.
- Finally, we multiplied this by the number of years Maureen worked to get her total pension amount.
