Round any decimals to the nearest penny.

Question

Your realized income is $2,415.64/month, and 54% are discretionary monies. If you want to save 3 months of fixed expenses for an emergency fund, how much must you save each month to fund it in 8 months?

Answer 1

First, calculate the discretionary income per month:
$2,415.64 x 0.54 = $1,303.55

Next, calculate the 3 months of fixed expenses:
$2,415.64 - $1,303.55 = $1,112.09/month

Then, calculate the total amount needed for the emergency fund:
$1,112.09 x 3 = $3,336.27

Now, calculate how much you need to save each month:
$3,336.27 / 8 = $417.03

Therefore, you must save $417.03 each month to fund the emergency fund in 8 months.