To solve this problem, start by understanding what is given:
1. Your employer matches 100% of your contributions up to 5% of your salary.
2. Your annual salary is $40,000.
Next, let's calculate 5% of your annual salary to find out the maximum contribution your employer is willing to match.
- 5% of $40,000 is calculated by multiplying $40,000 by 0.05 (since 5% is the same as 0.05 in decimal form).
\( \text{Maximum employer contribution} = $40,000 \times 0.05 \)
Now, do the multiplication:
\( \text{Maximum employer contribution} = $2,000 \)
Therefore, the most your employer will contribute in a year for your 401(k) plan is $2,000.
This matches with option D. Hence, the correct answer to the question is:
D $2,000
