2. John has been employed by Phone Services, Inc. for 13 years, and currently ea

Question

2. John has been employed by Phone Services, Inc. for 13 years, and currently earns $450,000 per year. John saves $40,000 per year. He plans to pay off his home at retirement and live debt free. He currently spends $80,000 per year on his mortgage. What do you expect John’s wage replacement ratio to be based on the above information?

Then here's are multiple choices, but My answer couldn't match all of them. How can I solve this problem?

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(a) 65.68%. (b) 70.41%. (c) 73.33%. (d) 91.11%.

Explanation / Answer

Wage replacement ratio = c 73.33%.

calculation given as below :-

1- ($40000+$80000)/$450000 = 73.33%

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