To calculate how much Sammy will need to save for his emergency savings and how long it will take him to achieve his goal, let's first determine his essential expenses and then multiply that by three to find the target amount for emergency savings.
Step 1: Calculate Sammy's Essential Expenses
Sammy's essential (fixed) and essential (variable) expenses are as follows:
- Essential (fixed): $1,292 (rent, car, insurance)
- Essential (variable): $420 (basic groceries, telephone, electricity, cable TV, batting practice)
Total Essential Expenses (monthly) = $1,292 + $420 = $1,712
Step 2: Calculate the Target Emergency Savings
Sammy wants to save 3 times his living expenses as emergency savings:
\[ \text{Target Emergency Savings} = 3 \times \text{Total Essential Expenses} \]
Calculating this:
\[ \text{Target Emergency Savings} = 3 \times 1,712 = 5,136 \]
Step 3: Determine Monthly Savings
From his budget, we note that Sammy is allocating $210 per month for other unpredictable expenses in his emergency savings account. This is the amount Sammy is saving toward his target each month.
Step 4: Calculate Time to Achieve Savings Goal
Now, we will calculate how long it will take to save $5,136 at a rate of $210 per month:
\[ \text{Months Required} = \frac{\text{Target Emergency Savings}}{\text{Monthly Savings}} = \frac{5,136}{210} \approx 24.4 \text{ months} \]
Since time usually rounds up to the next whole month, it will take Sammy approximately 25 months to reach his target.
Conclusion
Based on the calculation, Sammy needs to save $5,136 and it will take him approximately 24 months to achieve this goal.
The correct answer is: b. $5,136; approximately 24 months.