Question

Sarah’s essential (fixed) expenses are $750 per month, her essential (flexible) expenses are $500 per month, and her non-essential expenses are $250 per month. Her 401-K retirement account has $6,000, her education savings account has $3,000, and her emergency fund savings account has $2,300. Sarah wants an emergency fund of 5 times monthly living expenses. How much more does Sarah need to save to have an adequate emergency fund?
a.
$1,450
b.
$5,200
c.
$0
d.
$950

Answer 1

Answer:

b

Step-by-step explanation:

Answer 2

Answer:

B. 5,200

Step-by-step explanation:

Sarah's essential (fixed) expenses = $750 per month

Her essential (flexible) expenses = $500 per month

Her non-essential expenses = $250 per month

Her total monthly living expenses = 750 + 500 + 250 = $1,500

Sarah wants an emergency fund of 5 times monthly living expenses.

1500 × 5 = $7,500

Currently she is having her emergency fund savings account is = $2,300

She needs to save more = 7,500 - 2,300 = $5,200

Sarah need to save more $5,200.