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. How much is the total interest earned between both accounts in 60 days?

Question

dumbcow · Answer

First determine the amount saved after 5 months
Savings = Gross pay - deductions - expenses
- Deductions= % of gross pay  ---->7.65 + 11.75 +8.5 = 27.9%
-Expenses = 30% of net pay   ----> 30% (gross pay - 27.9% gross)
$$S = 5 [4520 - .279(4520) - 0.3(4520-.279(4520))]$$
Next calculate correct int rate..... 60/365 * APR
$$Interest = S[0.75*\frac{60}{365}*.0525 + 0.25*\frac{60}{365}*.038]$$