Question

Your gross income is $4,520.00/month. Your deductions are FICA (7.65%),federal tax withholding (11.75%), and state tax withholding (8.5%). Your fixed expenses are 30% of your realized income. You saved 5 months' worth in an emergency fund, placing 75% in a 60-day CD at a 5.45% APR and the rest in a regular savings account at a 3.8% APR. What is the total amount of your emergency fund? How much is in the CD and savings account? How much is the total interest earned between both accounts in 60 days?

Answer 1

I dont want you to give me the answer, I need help understanding it.

Answer 2

first, compute your income:
4520)(1-.0765-.1175-.085)=
then, income after expenses
Incomeabove*(1-.40)
then, emergency fund
(ncomeafterexpensesabove)*5
hten the investments
Let Cd investmetn= CD
let regular savings acct=RSA
(remember, RSA+CD=emergencyfundabove

Now we are to the math.
CD=.75*emergencyfund*
RSA=.23*emergencyfind

interest earned:
CD*.0545*2/12
RSA*.038*2/12
Note the 2/12 represents 60 days.

check all this.

Answer 3

.23? where does that come from?

Answer 4

@bobpursley

Answer 5

4520- 7.65- 11.75- 8.5 = 3258.90 x .30 = 977.68--- 977.68 x 5 = 4888.40 ( Emergency)--- .75 x 4888.40= 3666.30 ( CD)-------- .25x4888.40= 1222.10 ( Saving Acc)

is that correct so far?Also
would I add the cd interest and the saving together?

Answer 6

is it