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Calculating Annual Benefits

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An employer uses a final pay formula to determine retirement payouts to its employees. The annual payout is 3 percent of the average salary over the employees' last three years of service times the total years employed. Calculate the annual benefit under the following scenarios.

Year Average salary during the last three years of service.
17 $40,000
20 $47,000
22 $50,000

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Solution Summary

This solution calculates the annual retirement payouts to employees for the three scenarios.