D'von's employer matches his 401(k) contributions at "$1 per $1" up to 6% of his salary. What is the minimum yearly contribution D'von should make to maximize this benefit?

• A. $3,600
• B. $2,400
• C. $4,800
• D. $1,800

Answer: (A)

To maximize the employer match in a 401(k) plan that matches contributions on a dollar-for-dollar basis up to a specified percentage of salary, D'von needs to clearly understand the match policy. Since D'von’s employer matches contributions at a dollar-for-dollar rate up to 6% of his salary, the key is to determine how much D'von must contribute to reach that maximum match.

To achieve the full employer match, D'von would need to contribute an amount equivalent to 6% of his salary. If we presume that the choice of the minimum yearly contribution refers not just to a flat figure but rather to the total contributions made that would reach the maximum match threshold:

Let's analyze the choice of $3,600. If this amount corresponds to D'von's annual salary being such that 6% equals $3,600, his salary would be calculated as follows:

[

\text{Salary} = \frac{\text{Contribution}}{6%} = \frac{3,600}{0.06} = 60,000

]

At this salary, by contributing $3,600 (which is 6% of $60,000), D'von would fully capture the matching