Ask Question
29 June, 19:27

You chose to work beyond the age of 67. Your benefit increases 8% for every year you wait past the age of 67 but there is no increase in benefit beyond age 70. You are retiring at the end of this year, at the age of 72. If your normal monthly retirement benefit would have been $1,000 per month if you retired at 67, which math statement below could you use to roughly calculate your monthly benefit at age 72?

a) $1,000 + $1,000 x. 08 x 3 = $1,240

b) $1,000 + $1,000 x. 08 x 5 = $1,400

c) $1,000 + $1,000 x. 08 x 3 x 12 = $2,880

d) $1,000 + $1,000 x. 08 x 5 x 12 = $4,800

+2
Answers (1)
  1. 29 June, 19:40
    0
    Answer: a) $1,000 + $1,000 x. 08 x 3 = $1,240

    Explanation:

    Monthly retirement Benefit at age 67 = $1000

    Incremental rate on benefit beyond age 67 = 8%

    Incremental rate on benefit beyond age 70 = 0

    Period = 70 - 67 = 3years

    Estimated monthly benefit at age 72;

    Monthly benefit at age 67 + (monthly benefit at age 67) * incremental rate * increment period * 12

    $1000 + ($1000 * 0.08 * 3)

    $1000 + $240.00

    =$1240

    Similarly,

    This means monthly rate = 8% / 12 = 0.0066667

    Total period = 12 * 3 = 36 months

    Total = Principal + (principal * rate * time)

    1000 + (1000 * 0.0066667 * 36)

    1000 + 240.0012

    1,240.0012 = 1240
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You chose to work beyond the age of 67. Your benefit increases 8% for every year you wait past the age of 67 but there is no increase in ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers