How is the replacement ratio calculated according to the provided conditions?

The calculation of the replacement ratio is important for determining the level of income that an individual can expect to receive in place of their previous earnings, particularly after events like retirement or loss of employment. The method outlined in the correct choice involves a specific mathematical procedure aimed at providing a comprehensive view of this ratio.

The correct approach adds a fixed amount (340) to the average salary monthly credit. This adjustment ensures that the calculation considers a baseline or minimum income level that might be necessary for the individual to maintain a standard of living. After adding 340, the sum is then divided by 300 to normalize the value relative to a standard time frame or income level. Finally, the addition of 20% serves as a means to account for potential increases in living costs or changes in lifestyle that the individual might experience over time.

This layered approach combines actual salary data with adjustments for financial security and inflation, leading to a more realistic understanding of the income replacement needs. As a result, this method provides a nuanced and comprehensive estimation of what an individual can expect to receive relative to their prior income, reflecting both the fixed and variable financial factors impacting their situation.

Other methods, while they may offer simpler calculations, do not take into account these critical adjustments which consider both