A company gives each employee the opportunity to invest from each

Question

A company gives each employee the opportunity to invest from each paycheck up to 8 percent of his or her salary in a personal, interest-accruing retirement fund. The company automatically contributes the equivalent of 2 percent of an employee's paycheck to such a fund, regardless of whether or not the employee invests anything, and will also contribute an amount equivalent to any investment that the employee elects to make, up to 3 percent of that employee's paycheck.

If the statements above are true, which of the following is also true?

A- The company wishes to deter its employees from investing more than 3 percent of their paychecks in the retirement fund.

B- If an employee elects to invest 4 percent of his paycheck in the retirement fund, the total value of each investment, including the company's contribution, will be equivalent to 9 percent of his paycheck.

C- An employee gains nothing by investing more than 3 percent of his or her paycheck in the retirement fund.

D-If the total value of each investment in a certain employee's retirement fund, including company contributions, is the equivalent of 4 percent of her paycheck, then she has elected to invest 2 percent of her paycheck.

E- The smaller the amount of his own paycheck an employee invests in the retirement fund, the greater the amount that the company will contribute to the fund.

manu11 · Answer

Right ans shud be  B

B- 4+3+2 = 9 . All percentage are of paycheck. Hence True

MG1105 · Answer

Can anyone give a detailed explanation for this question? In the last sentence of the argument, the 3% contribution statement looks to be ambiguous. Not able to clearly untangle the stimulus.

Hea234ven · Answer

why not option D. 2% employer contribution and 2% employess = 4% in the retirement fund

teegee1996 · Answer

The answer should be B - as 4% contribution would lead to 
2% (automatic) + 4% contributed by employee and 3 % equivalent to contribution.
Adds to 9%

Hence, B is the correct answer.

teegee1996 · Answer

As the question states that

> contribution of 2% by the company automatically 
> Contribution by the employer + equivalent contribution up to 3% by the employer

So, if the total contribution is 4 % 
Then, 2% is automatic contribution 
and the rest 2% is the sum of (Contribution by the employer + equivalent contribution up to 3% by the employer)
So , the employer contribution could be 1% and not 2% as 2% contribution from the employee would sum upto 4% (2% from the employee and 2% equivalent from the emplyer)
And total contribution would become 6%

anand123456 · Answer

What about this

up to 3 percent of that employee's paycheck,

Many times we found upto some percent but it does not means that it that percent for all.

anand123456 · Answer

I think option B can be right only in a way because other option are not that much strong or have margin for correctness.

jrk23 · Answer

Can somebody please explain why "C" is wrong?

kheraarj · Answer

If an employee invests 10% in the retirement fund, they will definitely benefit from those investments in the future. So saying "gains nothing" is too extreme

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GDT · Answer

Can someone pls explain all answer choices

vietphuong027 · Answer

There are 3 parts of the total contribution:
1. Employee =< 8%
2. Automatic contribution of Company = 2%
3. Additional contribution, equivalent to the employee contribution, from the company =<3% or min  
So between B & D
B. employee contribution = 4% + automatic contribution = 2% + additional contribution = 3% (min of  ) = 9%
D. Total contribution = 4% => employee contribution =   / 2 = 1%

ravigupta2912 · Answer

Don't quite agree with B here. No where does the stem say that 2% would not be considered by the employer for contribution or if the employee elects to make 3% investment then, it translates into 3% additional investment (Considering 2% is already deducted automatically).

AndrewN  - request your thoughts on this one.

I voted for D on the reasoning that 4% total value of investment cannot be reached any other way. 2% by employee matched equally (2%) by employer.

B - if the employee *elected* to make investment of 3%, he would only invest an extra 1% considering auto deduction of 2%. This choice isn't "must be true" but more "possibly true".

rmahe11 · Answer

They can only invest upto 8 percent in overall contribution , B is wrong

Kaichi · Answer

Easy B or D

B best answer easily.
4% employee, 2% & 3% match = 9

D
4% total means
1% employee, 2% & 1%, so invested 1% not 2%.

Remember they match up to 3%, and other 2% is fixed regardless of amount. So it should be 1+2+1, not 2+2+2.

Cheers

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A company gives each employee the opportunity to invest from each

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A company gives each employee the opportunity to invest from each

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