Question

How much does the typical office manager, pipefitter, or sheet metal worker make in a year? Assuming that they contribute the maximum 15 percent of their paycheck into a retirement account and it earns 10 percent per year, how much would be in the individual’s retirement account after 16 years? (Don’t forget compound interest.) Were the amounts that Enron employees accumulated unusual? How much were the Enron insiders or their families/spouses left with after fines, etc.?

Answer 1

A typical office manager makes about $60.000 in a year.

If they contribute about 15% of this salary into a retirement account, this would be =0.15* 60,000 = 9,000 a year.

This would be an annuity for 16 years at 10% whose future value would be =FV(rate,nper,pmt) in excel where rate = 0.10, nper =16 and pmt =9000. The future value = FV(0.10,16,9000) = 323,547.57

The value at the end of 16 years would be 323,547.57

Yes, the amount Enron employees accumulated were abnormally higher than this figure the we arrived at becuase of the enormus Enron scam of 2002. Enron insiders and families were left with nothing and in some cases debt after fines and penatlies.