I have a question regarding how the units cancel in the following:
A company uses the following calculation to determine the monthly payment for its employees as they retire:
1.1% * average 5 years highest salary * years of service
If an employee worked 33 years and his average 5 year salary is $30,705.17, what is his monthly payment?
I used the following to determine his monthly payment, but I am not sure how the units cancel especially the years.
1.1% * $30,705.17 * 33 years divided by 12 months/year
I determined his payment as $928.83 per month, but the year units do not cancel unless the 1.1% is per year.
Is the correct calculation 1.1%/year * $30,705.17 * 33 years divided by 12 months/year so that the units cancel properly?
The $\$30,705.17$ is an average for 5 years of working. It is not $30,705.17 per year.
I thank you for your assistance.