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 5.25% 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

Gross=4520/m

Deduction=7.65+11.75+8.5=27.9%

Real=4520-0.29(4520)

=4520-1261.08

Real=3258.92/m

Expenses=0.3(3258.92)=977.676

SaveAble=3258.92-977.676=2281.244/m

Emergency Fund=5*2281.244=11406.22★

CD=0.75*11406.22=8554.665★

SA=0.25*11406.22=2851.555★

60dayCDapr=5.25/100/365*60*8554.665=73.828

60daySAapr=3.8/100/365*60*2851.555=17.812

Total interest earned=73.828+17.812=91.64★