General Maths - Superannuation Question? Help?... (1 Viewer)

[Sezza08]

came across this question in the success one HSC book... anyone have any ideas?

Stephen is about to resign from his employment after exactly seven years. The conditions of his employment state that after 5 years of service he is entitled to one month of long service leave and for each year thereafter 0.5 months of long service leave.

Stephen has never taken any long service leave and wishes to take his entitlement as a lump sum. His present salary is $23 500.

then theres a bunch of questions that i answered fine..then there is;

Stephen has contributed to superannuation for the duration of his employment. His employer contributed an equal amount to this scheme. Stephen's contributions over this time totalled $5200. Upon resignation, the superannuation benefit is calculated by adding the employee's contributions to 5% of the employers contributions for each year of service. How much superannuation payment should Stephen expect?

Answer in the book:
Superannuation Payment
= 5200 + 5/100 x 5200 x 7
= $7020.

just wondering...why it is multiplied by 7 at the end. yes i know simple answer is "because he worked for seven years" but doesnt the question say that over time, his contributions totalled to $5200.

anyone? thoughts?

 

[squeenie]

First, you should post this in the General Maths forum, not here.

And to answer your question..

Upon resignation, the superannuation benefit is calculated by adding the employee's contributions to 5% of the employers contributions for each year of service.

So it looks like they add $5200 + 5% every year as the employer's contribution. I think that should be right.