Please I'm failing math and need to understand this?Will fan and medal please! You earn $17.50 an hour and work 40 hours a week. your deductions are FICA 7.65%, federal tax withholdings 12.3%, state tax withholding 6.2%. your housing and fixed expenses are 30% of your realized income per month. you want to save 5 months worth in an emergency fund within a year. how much do you need to save each month to fund the emergency fund, and how much discretionary money remains per month? Thanks!!

Question

anonymous · Answer

@TINY10207

anonymous · Answer

im so sorry i will try to find out the answer

anonymous · Answer

I know 17.50/hr*40/hr=$700/wk but i dont know how to take out the deductions

anonymous · Answer

@dan815  @Famous5

anonymous · Answer

the total income = 17.5*40=700 weekly
                          = 700*4=2800 monthly
      total deductions % = 7.65+12.3+ 6.2 + 30= 56.15%
     emergency fund = 700*4*5= 14,000 annually 
           %= 14000/12=1166.67 monthly 
             =2800*56.15/100=1572.2 
         emergency fund %   =1166.67/2800 *100 = 41.66 %

anonymous · Answer

so you need to save 41.66 per month and the remaining discretionary money is 1,572.20?

anonymous · Answer

@AJ01

anonymous · Answer

No. discretionary income amount that you stated is annually, am i right?

anonymous · Answer

Your Q says Monthly.

anonymous · Answer

Plus, thats emergancy fund not discretionary

anonymous · Answer

no its asking for discretionary monthly. i know the emergency isnt discretionary but its asking how much you need to save each month and how much discretionary is left each month.

anonymous · Answer

This is  the discretionary income monthly: $405.53

anonymous · Answer

You make $1572.2 monthly after all deductions you've stated, correct? Subtract that with $1166.67 emergency fund you need to save each month. This equates that amount you can spend on other things.

anonymous · Answer

What do you think?

anonymous · Answer

You need to save $1166.67 each month?

anonymous · Answer

for emergency fund ya.

anonymous · Answer

or if you prefer 'fund' instead of save

anonymous · Answer

I say save b/c its your invest for the future

anonymous · Answer

okay that just seems a bit high 700*4*5= 14,000 why is the 5 there?

anonymous · Answer

Ill figure it out for you in a bit. brb. P.S. i did not write that.

anonymous · Answer

Back.
Explanation: $700 (= weekly salary) x 4 (= 4 weeks in a month (normally)) x 5 (= 5 months worth of emergency fund)

anonymous · Answer

This equates the amount of emergency fund for 5 months based on your monthly income $2,800.

anonymous · Answer

So each month you would save?

anonymous · Answer

@7k7

anonymous · Answer

Remember: you want to save 5 months worth in an emergency fund within a year.
Save: Emergency Fund per year = $14,000, So per month would be $1166.67 for a year.

anonymous · Answer

'Save' per month: 1. Emergency Fund $1,166.67    2. discretionary money $405.53

anonymous · Answer

Okay thank you!

anonymous · Answer

Because... $1,572.2 - $1,166.67 = $405.53. 

Subtract the monthly emergency fund ($1,166.67) from your monthly income after all deductions ($1,572.2) to see how much you have left to spend.

anonymous · Answer

Your Welcome!