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Math Asked by a SnapAndSolve user · about 20 hours ago

of 10: Your goal is to have an emergency fund equal to three months' living expenses. Your living expenses...

QUESTION 4 of 10: Your goal is to have an emergency fund equal to three months' living expenses. Your living expenses are $700 a month. Your take-home pay per month is $1,100, and you plan to put 10% toward your emergency fund each month. How long will it take you to reach your goal?
a) About one year
b) About 1.6 years
c) About 2 years
d) About 2.5 years

Answer

To calculate the time needed to reach the emergency fund goal, follow these steps:

  1. Calculate the total emergency fund needed: 3 months x $700 = $2,100.
  2. Calculate the monthly savings: 10% of $1,100 = $110.
  3. Calculate the time to reach the goal: $2,100 / $110 ≈ 19.09 months.
  4. Convert months to years: 19.09 months ≈ 1.6 years.

Answer: b) About 1.6 years

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